Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1901-10-12
H[RR|0|1 NOT AFRAID
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1 Continued From Third Page.)
We thus came finally to the tax OF
net earnings, or rather on net receipts
profits or income. This is the most log
ical form, of corporate taxation. TIL,
tax is not, like the gross earnings tax
| unequal in its operation. IL holds ou
no inducement, like the general prop.
erty tax, to check Improvements. 1t i.
| just; it is simple; it is perfectly pro.
portional to productive capacity. II
| short, it satisfies the requirements Of
a scientific system
In March, 1900 at the last assessment
of railroads in which took part Off.
clally urged the adoption of plan
of assessment which attains the END
we desire and that, too, in manner
| which insures absolute equnlity'in the
tax burdens placed on railroads. In the
resolution embodying my plan the net
earnings Of our roads was capitalized
at the maximum legal rate-.cwhich is
higher good deal than the earning rate
of stocks) to determine the aggregate
valuation for all railway property. This
agreed upon, the assessment of each
road was arrived at by taking ouch a
per cert of their total gross and net
earnings reported as was necessary to
produce the predetermined aggregate
valuation of all roads. Exceptional
cases, such as terminals, spurs and
branches, roads reporting no net or
gross earnings were especially provided
for.
The plan is not complex, requiring
the simplest arithmetical computation.
to arrive at rate of assessment and
values. 1t can readily be adopted vol
unfairly by the council under the pres
ent law, but If 1t is generally eoncurred
in its observance should be m;lde man.
datory by legislative enactment. I'm
der this plan we have unit rule that
works with ease and mathematical
and prejudices of those applying 1t
count for nothing and all roads are
Justly assessed.
II the objections to net earnings or
to the plan urged by me are deemed
too serious for its adoption there re-
mains as basis stocks and bonds
taken at their market quotations. Pro-
fessor Seiigman has observed Of this
plan:
THE only other method is that first
employed in Connecticut. and since
then in several other states, viz: laying
the tax on the market value OF the
stock plus the indebtedness, in the
proportion that the mileage within the
state bears to the total mileage"
Recent legislation indicates that
states are viewing with favor the taxa
ton OF corporations on this basis. The
price paid for stocks and bonds of a
corporation in the open market follows
more or less closely their earnings and
is fair index to the value OF their
property. Connecticut has followed
this plan with railroads for nearly forty
years, Massachusetts, Pennsylvania,
Maryland. Georgia, Illinois and to a
greater or less extent New Jersey and
New York employ this method. AS I
have said once before this method at
fords definite basis for certain and
uniform assessment. AS with all
schemes for taxation there are some
objections. such as the juggling, OF the
markets, the difficulty of valuation
where companies have no stocks or
bonds on the market. These objections
can be obviated to considerable de-
gree.
( There prevails some unnecessary
dread of this tax as dangerous inno-
walton due probably to misunderstand-
ing. So far as general corporations
are concerned we have for some time
taxed them on the market value of
their stocks. This was recommended
by revenue commission In 1893; rati-
fed by our code commission iii 1896:
and adopted by the legislature in 1897
in our new code. Last year the repub-
licans passed the Cheshire law taxing
express companies on the market value
Of their stocks and bonds and the law
was approved. The United States SUI
preme court has several times ex-
pressed its approval of this basis as
equitable and practicable, the opinion
in one of the leading cases being. writ
ten by our famous Iowa jurist, Justice
Samuel F. Miller.
But the main issue now before US,
as view the matter. is that some plan,
some syestem, be adopted that Will Sc
cure equity in raflroad assessments.
While should naturally prefer to see
adopted plan which seems to me best,
I am not a stickler for particular
theory. And assure you, my fellow
citizens, that If your votes elect me to
the presidency OF 1owa's senate and
any we'll ordered proposal providing us
with such system are urged ] shall
prove no obstruction to its enactment
In conclusion, beg to say to our
democratic critics that the people of
Iowa have right to expect the re-
publican party to deal property with
this question of corporate taxation.
In the past we. have responded fully to
their demands as the history of the agf-
tation for control of railroad freight
rates and the management of our state
institutions bears ample testimony.
And know that our party will meet
this issue squarely and settle it not in
the spirit of malice towards the cor
porate interests, nor with purpose to
injure particular corporations, but with