The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1901-01-11
DIFFICULT PROBLEM

1t is quite likely that the members of
the Missouri Legislature begin to realize
some of the essential difficulties con
nected with what is called franchise tax
alton. That vague and indefinite phrase
fairly expresses Il general theory of tax
alton, but Legislators must deal with
something more concrete han mere gem
civilizations. And franchise taxation as
a concrete proposition is far from being
as simple as ii seems when put forward
as an abstract theory.
OF course, the difficulties involved in
the correct solution of any particular
legislative problem should not drive the
conscientious legislator from its con-
sideration. Nor, On the other hand. can
they be offered as excuse for adopting an
incorrect solution simply because it is
easy. The Missouri Assembly must pur-
sue its consideration of franchise tax
ation with intelligent regard for the wei
fare of all the people of the State, and
with discriminating understanding of
the actual effect TO follow any contem-
plated legislation.
There is no escape from the necessity
TO determine. with absolute accuracy
what is meant by n franchise. Nor is
there escape, either, from the necessity 10
determine the relation of a new line of
taxation to that already imposed by *
listing laws. The right of corporate ex-
istence can be called a franchise derived
from the State, in the broad use of the
word huf tho IaUiSlatura p,trct mona tbo
less consider whether it is expedient and
wise that the business lone by an in
corpOrated stock company shall pay a
higher tax han would be paid by eX-
actly the same business conducted by an
individual or a copartnership. To do
otherwise would be to risk the adoption
of a policy of discOuraging the cor
porated form of doing business. and
there IA be no doubt that the people of
Missouri have no such intent.
Even if it be determined that they are
not calling for n burdensome and penal
izing tax on all incorporated business
enterprises as a consideration for the
right of existence granted by the State,
and that what the people do want is
t1AilAoh VI lubSt lIdItlllStN EItultu 10
quasi-public corporations which give
them special and exclusive privileges.
many difficulties still remain. 1t is still
necessary to determine how far fran
chises Of this sort are taxed under ex-
listing laws. No sensible legislator who
intends to be reasonable and fair means
to create a new tax on any class of prop
arfr urhafhar - h. sor-;lIo -
property, which is already fully taxed.
And what would not be lone knowingly
should not be done ign%Orantly and
blindly.
a communication from an unusually
we~ll-informed correspondent. who has
gathered valuable experience in actual
service in the Missouri General AS
sembly, which appears in another
column of to-day's Republic, directs at
tention to the danger of this blunder.
But the writer is himself blind to the
chance of an equally grave blunder. He
can see the mistake that would be made
in taxing the right TO do business under
the guise of franchise taxation, but ap-
parently cannot see that his own sugges-
llou VI SuCn 10 the laws as
will assure the assessment of corporate
property or holdings at the true value
is a narrow application Of a great vital
truth. Business corporations are GER
tainly not any more favored by assess
ments under true value than are bust
ness copartnerships and individuals.
What is needed more than anything
else in his matter of taxation is n mode
Of assuring the assessment Of all prop |
erty, corporate or individual, at its true
value on an equal basis. If this could
be done the State. as well as its county
and municipal subdivisions, could easily
raise an adequate revenue at a lower
rate of taxation than now prevails. 1t
would not be necessary to threaten one
class of business men with the infiction
Of a penalty simply because they do
business as incorporated companies; it
would not be necessary to project a tax
on the income of corporations while let
ting the income of partnerships and in
1ividuals 20 free.