The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1907-11-22
RAILWAY TAXATION
H. T, Newcomb Says It
Should Be as on Other
Productions.
GROSS EARNINGS TAX
S. EN- of Indirect State
Taxation Leads to Fx-
travagance.
GROSS EARNINGS TAX

Following Is an abstract of the adj
dress of H. T. Newcomb of Washing
ton, delivered yesterday before the
Municipal League session of the
American Civic association meeting in
Providence, r. 1. Mr. Newcomb spoke
on Taxation of Railways"
ANY tax laid upon railway prop
erty, revenue or operations" he said,
is an indirect or crooked tax which,
although paid in the first instance by
the railway corporation, Is inevitably
shifted, through the adjustment Of
rates, to the persons for whom SER
vices are performed, Taxes levied
upon railways are, like other taxes, a
burden upon the public and should be
kept as light as is consistent with ade-
quate provision for the necessary ex-
penses of a government economically
administered, is thus established
Nevertheless there Is an element Of
potential popularity in indirect taxa
ton of this sort, which, ambitious and
shallow or unscrupulous politicians
are not likely to overlook.
Just as the Federal system Of in
direct taxation hasN led to federal
wastefulness, SO the newer system
Of indirect taxation in the State is
leading to State extravaganza, and
even providing convenient cloak for
dishonesty and fraud Misled by the
pretence that the burdens Of govern
ment have been taken from the
shoulders of individual taxpayers and
shifted to corporations the voters OF
many States have already shown
themselves more willing to bear with
extravagant expenditures under the
new system than under the old, they
were to meet the legitimate expenses
of economical administration. There
is no protection.
obviously any tax upon railway
facilities, earnings or operations,
must enhance railway charges and
thus tend to restrict the number and
extent Of territorial changes. 1t sup
ports and establishes the conclusion
that any disproportionate taxation
of railway transportation constitutes
1
production in one of its most efficient
forms. Railways should be taxed nc
4 more and no less than other agencies
of production.
1.-THE State or municipality which
lays such a tax simply adds an espe
cial burden to the productive indus
tries conducted within Its limits, fol
the purpose Of selling In competitive
4 markets beyond those limits, ant
4 thereby ordains that It's citizens, in
dividual and corporate, shall be at {
disadvantage In every competitive
market in which they meet those 0
States or communities whose system
Of taxation are based upon principles
that are nearly correct.
1.-THE capitalization basis must b,
rejected as inexact and as at least a.
likely as the general property tax t
lead to unequal burdens, or thes
remaining, the net earning tax woul'
be preferable If the basis thereo
could be discovered with precision ant
without involving an inquisitorica
examination of private aspect o
the public business so taxed
1.-THE gross earnings tax is the onl
one against which there are not In
surmountable objection 1t can b
collected at minimum cost; 1t cal
be readily adjusted so as to equaliz
the burdens Of transportation an
other forms of production; and 1t Of
fers the least possible incentive t
the imposition of excessive taxatio
to support an extravagant administra
ton Of the peoples business"