The Lexington intelligencer. [volume] (Lexington, Mo.) 1901-1949, 1902-11-29


the value Of the adjacent farm land
gross inequalities in the
assessment Of the same railroad in
counties demonstrated
that the local Official is utterly unable
to cope with the problem. For this
reason there is a marked tendency to
lodge the assessment of the property
of railroad and similar corporations 10
a state board. There is, however,
another and greater difficulty in
applying the general property tax to
the corporation. Property is supposed
to be worth what some one will give
for It, But the inability Of an owner
to pay taxes depends on what the
property is worth to him. Now in
the case Of a corporation these two
values may greatly diverge. The
poles and wires Of telephone COM
pany are worth a good deal when
wrought into line and equipped for
telephony; they are worth very little
when disintegrated into reels of rusty
wire and stacks Of second hand poles.
Yet the latter Is Of all the value that
the courts Of Ontario allow them
under the general property tax.
Granting you cannot ascertain the
value Of spec.aiiz,d property disin-
s. - Ito worthless constitu-
ents; 9fanylDg you should value an
asseublage Of road bed, ties, rails,
bridges and cars as a railroad, not as
scrap heap, what other criterion
have you save what the entire prop
erty will sell for? And this can best
be learned by ascertainlng the market
value Of the securities based on the
property as a going concern, that Is,
the stocks and bonds.
'eThe difference between the value
Of railroad thus calculated and the
cost Of replacing its physical property
is by some termed the value OF the
franchise or right to do business
Just now through the double tier Of
states from Ohio to Nebraska (saye
only 1ndiana) a vast controversy i:
raging as to whether these franchise:
are property and taxable as such. In
Ohio the railroads are appraised fol
taxation at % per cent of theil
market value, whereas the common
rate Of assessment Of other property
is 60 per cent. If the roads were
entered at the higher figure they
would have to pay 80 million dollar
more taxes than now. Owing to the
fact that the market value of cor
porate securities reflects prospective
profit rather than present profit il
has been argued that the true basil
for the taxation of corporations il
their net earnings. But in such case
of course, they must be put in a clas
by themselves and taxed at a differen
rate from that on property. Thi
special treatment gives fine chanc
to hoodwiuk the people. Michigan
after trying the plan several years
has gone back to property-ipcludinI
franchlse-as basis for railroa,
taxation.
prof, ssional or business income
present forms Of taxpaying capacit
which are not reached under ou
present S, stem. Many authoritie
therefore advocate a state tax upo
such incomes as are not derived fror
property subject to taxation. Such
tax should not, of course, apply t
, incomes below certain figures. Ma:
. sachusetts does not begin to tax unit
the income exceeds 50, 000 BY mean
Of taxes on inheritance, on corpora
tions aud on incomes it would b
! possible for the commonwealth ne
only TO pay its own expenses but t
! come TO the relief Of the local units