The times. [volume] (Richmond, Va.) 1890-1903, 1901-10-29
THE ILLINOIS TAX PLAN.

"A lliltISStiii.- .tiAN aa'sf
risiop has recently been made ny me
st,,,retne Court OF the State oil III
.,ois against the State Beard OF Equal
Nation, cmbodyin::. rs ii does, instInc-
lions us 10 how corporations SHAH De
assessed on their capital stock, iaciud-
Ing the value of iIeir franchises. We
Z have not seen the decision i'll full but
according to the Chicago Chronicle the
court says that in assessing 4 corpo-
ration the assessor shall ascertain and
take into consideration tie market or
cash value OF its stock and the total
amount of its Indebtedness; from The
sum Of these two amounts he SHALL de-
duct the assessed value OF the corpo-
ration,s tangible property; the resa!t
will be the amount Tor which the cor
poration shall be assessed Tor iaNa;ion.
BY way Of explanation. the Chronicle
odds:
This is very clear and it may be IL
Illustrated by Il l;ttlie OF ISuics.
Take the ease OIL Il corporation with
stock OF s1,uUu0oU, wortn IN the mar
lel so cents OH the ao1ar. or - totsii
! pl SS0u,UUU; the corporation owes
f5Oouuv and has tangible property
worth S5o0.0DU. To assess this corpora
;ion, the value OF tile. capitai STOCK ana
the amount OF it's debt VIII be added
together and from the sum THUS pro
luced the value Of The tangible prop
erIy Will be deducted. The balance Is
the amount TO be assessed. 1ils IS
the statement:
Stock, $i,0Vu,0O0, market
value. .... SVo'po
Debt. $50. ........ $500. ooo,''V9
Total. .............. $1,5ooveY
Deduct tangible property. 100000
Amount of assessment. -. 5 SUo,u09
The amount TO be assessed. rs aScer-
tanned by this calculation, is the same
rs the market value of the capital
stock The assessment might as Well
have been made at that sum from the
beginning.
The reason is plain. The bonded
debt of the corporation was incurred in
the purchase or construction OF what
constitutes it's tangible property The
two amounts offset each other. The
result is that the market value of the
stock represents all the taxable prop
erty OF the corporation, its tangible
property and its franchises.
Just how that will operate as 10
RAILROADS e.d other corporations whose
physical property does not lie wholly
within the State of Illinois we are not
Informed. We understand that III
North Carolina, the Illinois plan has
been adopted. and the railroad corpo-
rations are assessed on their capital
stock according to the number of miles
of road in the STATE.
1t is well known That the industrial
corporations of the country. popular
ly called trusts, Art capitalized on The
DasiS Of their earning capacity rather
Than upon the basis of their physical
property. This is largely true also of
railway companies. of street railway
companies, Of telephone companies
and other such corporations 1t would
appear from the Illinois decision, above
cited, that the Supreme Court Of that
State had in mind in rendering this
decision the IDEA of taxing corporations
upon that same basiS-that is to SAY.
according to their earning capacity
We have heard it limited that the Com
mittee on Finance of the Virginia
Constitutional Convention has under
consideration the same principle in
framing a tax ordinance for Virginia.