The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1904-08-11
Gross Earnings Tax.

| 81
that presented itself to urge upon the
voters of the State the Importance Of
ratifying the amendment to the State
constitution recommended by the leg
islature providing for an increase of
the railroad gross earnings tax to four
per cent. For in the movement which
resulted in the enactment of that meas
ure Mr.. Dunn, Republican candidate
for governor, took prominent part.
To his efforts, more perhaps than to
those of any other man in the State,
its passage is due.
The gross earnings tax is what is
known as a committed tax. Railroads
like other property are taxable in the
first place on their valuation. This
method is cumbersome and inconven-
lent and the tax on gross earnings
was resorted to in order to avoid trou-
BILE and expense. To make. this tax
legal it must be equitable. That is,
the rate decided upon ought to be such
as to make the committed tax equival-
ent in rate to the specific tax on other
classes of property. In other words
to be just to all concerned the tax
collected from railroads by the gross
earnings method ought to be the same
as the tax which would be collected if
railroad property were assessed as
farming lands. factories and mercan-
tile establishments. When it was i'm
posed the three per cent gross earn
ings tax was thought to be equivalent
to the tax railroads would have to pay
under general tax laws.
1t has for many years been Mr..
Dunn's opinion that this was not the
case and that the present gross earn
ings tax of three per cent is too low.
His view is fully set out in his re-
port to the legislature as State audi
tor for the years 1S97-1S9s. He had
given considerable time to the inves-
tigatiOn of the matter and he found
that at that time the cost of the rail-
roads within the State and their
equipment was in round numbers
s270, 100000. If this property were
assessed at fifty per cent of it's value,
as is other property in the country
districts of the State, it would have
been called upon to pay at the rate of
twenty mills on the dollar on sl35, 900, :
900 or 50, 100000. Instead of that it
actually paid S1,009,2 24. 1t was esti-
mated by him that railroad corpora
tons which owned nearly one-ffth Of
the taxable property Of the State paid
but a thirteenth of the taxes. In the
year 1896 the owners Of all other prop
erty, taxed on a valuation basis paid
rate of twenty-four mills, or three
times more than the owners of railroad
property. After a statement of these
facts to the legislature, Mr.. Dunn
concluded:
SIN my opinion the time has now
arrived when our railroads are able
to stand upon their own bottom and
share equally with all our people the
of four per cent on the gross earnings
would be neither unjust or burdensome
to the railroad companies"
Subsequently in accordance with his
recommendation an amendment to the
State constitution was recommended
by the legislature providing for
the increase in the gross earnings tax
advised, but at the next election the
proposition failed of ratification for
the reason that it did not receive a
majority of all the votes cast at the
election, although it received nine out
of ten of the votes cast on the propo-
sition. In his next report Mr.. Dunn
again directed his attention to the
matter as follows:
Our biennial report to the legisla-
ture Of 1899 contained a strong rec
concentration for an increase in the
gross earnings tax paid by railroad
companies from three to four per cent.
We believed then and believe now that
the railroads are not bearing their
just proportion of the burdens of tax
alton. : = y This office stands by
its recommendation with reference to
the railroads gross earnings tax made
to the legislature of 1899, and earn
estly recommends that Chap. $50
General Laws of 1901, or similar
proposition, be again submitted to the
people of the State.''
Mr.. Dunn's recent reference to this
subject shows that he still regards the
ratification of the act providing for an
increase in the gross earnings tax of
paramount Importance. AS this year
it is to be voted upon by separate bal
lot there is small danger of the meas
ure being overlooked. If it does not
become law it can only be because
Notwithstanding all that Mr.. Dunn has
said, the people still believe the three