Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1903-02-14
HOW THE RAILROADS ARE TAXED

Explanation of License Fee SYSTEM
Railroads Do Not Assess Them.
selves.
Issued In Behalf Of Wisconsin Railwaysl
How are the railroads OF Wisconsin
taxed? One would suppose, after all that
has been said and written or this subject
during the last few years, that everybody,
would now know. But this Is far from
being true. And If we may judge from
the number of questions that have been put
to us, we may say that those who are Ia
miIiar with the provisions of the law would
not form a very large multitude.
LICENSE FEE SYSTEM.
In explaining the taxation of railways
and of some other corporations that pay,
the so-called license fee, the Tax Commits
sion on page 20 of Its first annual report
said: Certain classes of corporations or
persons engaged in Quasi-pubic enterprises
are required to contribute to the public
revenues amounts not measured or appor-
TONED by property valuations, but, usually,
by fixed percentage Of the income pro-
duced from operation OF the business en-
gagged in. Generally 1t Is In form a license
Quoting the enterprise. But ordinarily 1t 10
more than mere charge for business
privilege or franchise. In most instances
1t Is essentially measure of revenue, the
exceptions-in lieu of other forms Of taxa
tion."
That the fees collected from the rail-
roads are something more than "a mere
charge" for business privilege appears
pretty plainly from the provisions Of the
law. Under present statutes, the rate OF
taxation Is graduated according to- the
average amount Of annual gross earnings
per mile Of road, viz:
On roads earning So, 600 per mile or over,
per cent Of gross earnings;
On roads earning $500 and less than
$4,000 per mile, 31a per cent Of gross earn
ings.
On roads earning $4,000 and less than
$1,000 per mile, per cent of gross earn
ings;
On roads earning $1,000 and less thar
$4,000 per mile, the tax Is So per mile and
213 per cent Of gross earnings In excess
Of $1,000 per mile;
On roads whose gross earnings are less
than $1,000 per mile the tax is SIS per mile.
GROSS EARNINGS.
The license fee or tax is based upon the
annual gross earnings from operation in
the State, including such earnings from In
terstate traffic as are earned within the
State. The gross earnings from which the
amount of fees is determined, are ascer-
tained from statements made annually, by
each company under oath Of an officer, to
the State Treasurer and to the State Rail-
road Commission. The latter officer Is re-
quired to approve the report made to the
Treasurer before the license can be issued,
authorizing the company to continue it's
business.
SELVES
1t Is often said, generally by those who
wish to uproot the license fee system, that
under this system the railroads assess
themselves. The railroads make returns
annually to the State of their gross earn
ings and the law of the State does the
rest. The reports are sworn to, and be-
fore license can be Issued the Commits
sioner of Railroads must approve the COM
pany's report. Thus it appears that the re-
ports Of the railway companies are not
final and conclusive. 1t Is not only the
privilege but 1t Is the duty of the Com
missioner of Railroads to review them.
There Is never SO thorough q scrutiny of
the ordinary taxpayers schedule as there
is of the railway company's statement OF
it's gross earnings. If there were, much
of the property which now escapes taxa
ton would be on the tax roll and this Will
be admitted by every candid man.
Railway officials may not be more honest
than other people, but they are surrounded
by conditions which not only enable them.
but which compel them to submit full and
accurate returns. They are obliged to make
many reports to the officials of the different
States, to national officials and to their own
stockholders. 1t should be impossible so to
juggle the figures as to hide anything dis
honest. Anything crooked would inevitably
appear a comparison Of these different
reports.
How many citizens of Wisconsin Pay
4 per cent. of their gross income for
taxesf All the principal railways pay
per cent.