Northern Wisconsin advertiser. [volume] (Wabeno, Wis.) 1898-1925, 1903-01-22

taxpayers Ol lulS commonwealth.
In determining that we should aban
don the license fee system of railroad
taxation in Wisconsin, the commission
will simply reaffrm the declaration
made two years ago that the license
fee system would be superseded by a
more scientific method" of railway
taxation. The license fee system if
fairy adjusted as between railroads
and other taxable property of the state
today upon an agreed percentage
would furnish no assui ance of a fair
division of tax burdens a year hence.
Conditions arise from time to time in
the commonwealth requiring an in
crease in the rate upon taxable prop
erty. At such times property taxed
under the ad valorem system must
bear all of the increased burden, while
the percentage upon which the license
fee is based remains the same. No
valid reason car be assigned why rail-
road property, remunerative as it is,
its value increasing with the develop
ment and growth of the state. should
not bear its relative proportion of
whatever befalls ether property by
reason of increases in taxation to meet
emergencies and exigencies that come
in the oldinary course of human
events. Legislative appropriations
from year to year are increased as
the expansion and development of the
state creates proper and unanswer-
able demands therefor. Public build
ings for properly housing and caring
for the states dependent, its criminal
classes, for its schools, and courts,
and university, must be erected, re-
newed and enlarged repeatedly. 1t is
but just that railroad property should
bear it's share of such appropriations.
The railroad companies under the
license fee system have no interest
and no concern respecting the money
appropriated by the legislature. 1t is
a fact within the knowledge of every
legislator of experience that the in
fiuence OF the railroad lobby is often
employed to pass legislation resulting
in an increase of general taxes in ex-
change for the votes if those interest
ed in such appropriations to defeat
other legislation obnoxious to the
railroads. Doubtless millions of dol
lars have been unnecessarily expended
through such combinations. This
could not have occurred if the rail-
roads had been taxed under the ad va
loren system and possessed the same
general interest that other taxpayers
have in keeping appropriations within
reasonable limits.
But in addition to all of the other
objections to the license fee system
when it is remembered that they are
permitted in effect to fix the amount OF
the taxes which they will pay, with
out any practical check or supervision
by the state, no excuse or justification
can be given for continuing a plan o1
taxation so unjust to other taxpayers
of the state Investigations which
have been conducted by the interstate
commerce commission in the courts
leave no room to doubt that millions
of dollars are paid back to shippers
in rebates under arrangements deemed
advantageous, directly and indirectly
to both the railroads and the favored
shippers. That these rebates in Wis
consin alone amount to vast sums CT
money annually is beyond dispute
Not one dollar of this sum related tC
shippers, and properly part of the
gross earnings of railroad companies
is reported to the state. That valid
claim exists against the railroad com
anies, for the amounts so withheld
from their reported earnings, does not
admit of question, whatever difficult
ties lie in the way of making proof OF
the same.
In ascertaining the value of railroad
property the average value of their
bonds and stocks in the market would
be an element to be taken into consid-
Grafton. If it were taken as the sole
basis for valuation, the railroad com
panies ought not to be heard to COM
plain of unfairness to them because
they levy such a tax upon the public
in the form of transportation rates as
will produce a certain income COM
puted upon the market value of their
stocks and bonds, in addition to ex-
acting enough more to maintain the
roadbed, rolling stock, depots, and
grounds, in good condition, and pro-
vide an increasing surplus; but the
average value of the bonds ard stocks
should not be taken as the sole meth
cd of ascertaining the value Of rail-
road properties for taxation. The
state board of assessment would ap-
praise the actual value of the tangible
physical property of railways. In adj
dition to this the value of the fran
chise, into which there enters many
elements embraced in the corporate
power and privileges with which rail-
roads are clothed, must be reckoned.
Supplementing all these, the earning
capacity of the property would consti-
tute a most importane factor.
Michigan adopted the ad valorem
system of taxing railroads and other
public-service corporations, estab-
lished state board of assessment, as
certained the value of railroad prop
erty, applied to it the same rule of tax