The Minneapolis journal., 1902-07-26

express companies Minnesota already
has applied the income tax principle.
These companies now pay into the state
treasury 3 per cent of their. gross re-
ceipts, except express companies, which
recently were raised to 5 per cent. Rail-
roads after an next will pa the state
4 per cent of their gross earnings, If
the people so vote on the measure to be
submitted to them lin November: 1850.
The permission to tax railroads on
their gross income grows out OF the con
stitutional amendment. Of 1871, which
provides that legislative acts relating to
that subject. shall be- submitted to the
people, thus inferentially approving OF
that method of taxation as applied to
railroads. The state now realizes about
81 100000 per annuIna from the railroad
income tax, and, If the people vote to
Incl ease the rate to;T4 per cent this, fall,
another year will see;$2,000,000 as the an
nual revenue ifron- this source: About
$40, COO a. year is now realized from tel
ephone and express ::- company Income
taxes. H-'%.~~-@+s: o. ,:g."s4 .r- ", ~
In Wisconsin, where the recoInmenda-
tions Of Profess oFt Richard ~. Ely, in
his famous report as q member of the
Maryland taxg commission heye been fol-
lowed, the income orr gross receipt tax
principle has been pursued In the case
Of street railways, Insurance companies,
trust and guaranty companies, dam and
boom companies, as swell as railroads and
telephones. For 1900 wisconsin realized
from its Corporation income tax .provi-
siens revenue Of $2,045,873 for state
purposes, besides eaa large additional rev
enue gfrom street railways for the ,.coun-
ties and cities through which: the lines
were, operated. 2sEuropean,e Australian
and Canadian municipalities tax: public
service corporations enjoying a franchise,
or public permit, on their: income OF gross
receipts, as a rule. DR.. Albert ShaW's
investigations ofS+this subject on his
| tention: the SUCCESSFUL experience of Ber-
lin and Paris IN this: regard. being spe-
cia1ly interesting The principle at the
base of this franchise tax is, that the
franchise is simply a permit to-. .,use. a
sovereign power inherent in the public,
and that the tax lis the rental for such
use. ar'-.-z :.@sh ~sst-a. tG.., -, :,
Income Taxes in Other States.
The American states which levy and col
lect income taxes, either general or spe-
cial are: Massachusetts, Pennsylvania,
Georgia, Louisiana, Missouri, North Car
olina, South Carolina, Tennessee and Vir-
The following states, instead of an in
come tax, levy an occupation tax In the
shape Of business or professional IL
cense: Alabama, Arkansas, Colorado,
Florida Kansas, Kentucky, Mississippi,
Montana, Nebraska Oklahoma, Oregon,
Texas, Vermont and West Virginia. -.
Both income and occupation taxes are
collected in Georgia, Louisiana, Mis-
souri, North Carolina Pennsylvania.
South Carolina, Tennessee, Virginia and
Massachusetts,. .s .... ...s. =
In Massachusetts income and occu-
patton taxes are levied by towns and cities
only and $4,000 Of income is exempt. The
Massachusetts, income tax dates from
colonial times-the acts OF 1916, 17O6
and 1738-and is embodied In the state
| constitution and the statutes OF 1777 to
| date. =,
The Massachusetts, law, has not been
efficient as revenue producer, accord
| ing to Professor Ely, because of the
large exemption and the exceptions which
| permit Of evasion. +
He calls attention to the fact that the
federal income tax in 1867 produced IN
! Massachusetts, the heavy revenue Of $8,-
849, 1853, as compared with about $1,000,
900 as the direct state tax Of Massachu
setts in 1887 The federal income tax
in New York in 1867 produced revenue
Of $20, ,107 ,547, as compared with $5,8O5,
| 400 as the direct state tax in 1887. From
this Professor Ely ((see pp.s s294-Sl0, Tax
| alton In American States and Cities
argues thatea moderate income tax with
small exemption and general IN Its
| provisions would be a fruitful and >reli-
able source sof revenue.
@ Income as htRevenue Producer.
AS. bearing upon the revenue suficiencs
OF a well equipped income tax, the fol-
lowing factsis of interest: The: total as.
T sessed valuation of forty nine states, as
ascertafned by the Wisconsin tax com
mission last year, is not quite $50, ,OO0, 600,
600. At rate OF rs mills, the total di-
rect taxes levied by the forty y-nine states
would amount to about $75,000,000. Com
pare this with the revenue from incomes
under the old income tax Of 1S63-as72
4 In 1866, when the population OF the United
1 States was less than half what 1t Is now
!. and the south and much of the north was
+ depleted by war, the federal income
/ taxes amounted to $72, 1882, 159, which was
j 40 per cent greater than the total interna
revenue derived from liquor and tobacco
and far greater than all state taxes COL.
! lected from all sources.
1 In Virginia, at the present time, the
| income and occupation taxes are reported
/ as producing one half of the revenue fol
state purposes, about 81, 100000 per an,
i mum. In most. Of the states that3tax In
comes, however, the statute provides 81
many exceptions and exemptions, that the
1 tax cuts little figure in the revenue sys.
i tenn of the state.
/ In the United Kingdom, the income taa
i is the chief feature of the national reve,
4 nue. system. First employed in the Eng
4 lish act OF 1435, the income tax was esfab-
7llished as a,nati tional war measure by Pit
1 in 1898. and since Peel's act IN lS42, 1t hal