Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1907-11-27

Hon. George Pottle If Lewiston, of
the Board Of State Assessors, was at
the Office Of the board Tuesday for the
first time since his return from Column
bus. Ohio, where he went as a repre-
sentative from Maine To the National
Tax Conference. Mr.. POttlc states
that there were about 300 delegates
present from ali over the Union, and
that every day Of the conference was
crowded full of business. The qnes-
ton Of taxation was discussed by
some of the brightest men in the coun'
try, and one of the most important adj
dresses delivered was that of Hon. AL
len r FOOte, president Of the Tax AS
scciatOn Of North America. His
subject was the relation of franchise
taxation to service rates, and he spoke
in Part as follows:
That tax may have a fair re-
latiOn to the service rate it must be
assessed on gross earnings. concerning
which there cannot be two opinions,
and not on property and franchise as
to which there must be as many opin-
ions as there are assessors.
There is no comparable relation
between the value Of property and
franchises of public service corpora
tons and property in other industries
There is an organic difference in their
character and purposes. The percent
age of income paid out for the labor
| and material to keep rental property
! in service is very small. the percent
age in the case of manufactured prod
ucts varies greatly. Public service
must be used when and where pro-
iuced and then cease to exist. over
&. per cent of their gross earnings is
raid out for labor. There can be no
economic comparison between prop
erty used to provide services and prop
crty used to produce commodities or
rental incomes.
while a tax on net earnings is moe
scientific than a gross earnings tax, II
is not so practical and is more IN
uuisitOrial It's relation to service
rates is not so obvious: some corpora
lions produce no net earnings, but all
produce gross earnings.
1.-The objection that a gross earn
ings tax bears uneQually on net earn
inys can be overcome in simple ana
tactical way by fixing low gross
earnings tax all public service must
nav. even though they have no net
earnings. Then establish scale for a
graduated increase in the tax by
adding a fraction of per cent to the
basic tax for every per cent of Varla-
fion between costs Of operation ana
gross earnings. Thus substantial JUS
tice can be done and mathematical
rule formulated that will cover every
case and leave no room for difference
of opinion.
"A gross earnings tax will produce
large revenue with the least machinery
and expense 1t will afford grow :
ing basis for taxation. as experience ~
Ohio demonstrates. In the 10 years OF
| 1896 1906 the property valuation OF the
state increased nearly % per cent
while the gross earnings basis in
creased nearly l20 per cent.
Until people are educated to dis-
card all forms Of indirect taxation.
gross earnings tax. properly graded as
suggested, is recommended for all
public service corporation taxation.
BY adopting this tax in lieu of all other
forms and studying its effects upon
rates the people will soon learn that a
| low tax. or no tax. and low service
! rates are economic twin sisters"
Mr.. Pottle was much pleased with
| the State of Ohio, and enjoyed every
| moment of the trip. 1t is a very Level
| country. he said, and well adapted to
| ro-,,;nC hut ono thing that he noticed