The San Francisco call., 1908-10-12
The Proposed Tax Amendment
BY E. A. Zion


For the year 1908, the state will
collect from San francisco. for state
purposes. 40 cents on the hundred We
are assessed for S455. 600 900. We viii
pay the state $1.s20.O00. IL the COR
porations OF San Francisco will pay
the state this amount under the pro-
nosea Amendment. and II the same
holds true for every other county. then
If is evident that there will be no state
rate on general property
Professor Plehn has never published
any figures showing the proposed re-
suits OF corporation taxes But we
can fairly test the sufnciency or the
new plan by selecting the three largest
CORPORATIONS in sSan Francisco: The
United Railroads. we must average. as
previously explained. assessment, s2O,-
100000, gross receipts $6.OOOOOe. pro-
posed tax. s24O, 600; San Francisco Gas
and Electric company assessment, Si,-
coo, 600, gross receipts, filed with super
visors, $4228.479, proposed tax slos,-
139; Pacific Telephone and Telegraph
company, assessment, $3.457.0OO. gross
receipts. fled with supervisors. $l,S2e,-
SIS, proposed tax. $53231 The total
property which the amendment relies
upon for state revenue is assessed at
S55.233.259. according to Professor
Plehn. The three assessments given
which the total proposed gross receipts
tax would be s462.s70. Until figures
are produced to the contrary, we may
fairly assume that the remaining $24.-
776,259 will pay in the same proportion.
We will even grant that the true re-
mainder is S32, 2,251.2 .259. which Is OBJ
tanned by using the actual instead or
the average assessment OF the United
railroads. II this remainder pays in
the same proportion as the three larg-
est corporations, tt will produce S4S6.-
600. Our total state revenue from cor
porations in San Francisco, under the
new plan. according to our estimate,
would be s9sS,S70. But under the pres
ent plan we pay s1.820.000. 1t is
evident that the remaining SS71.630.
needed by the state. must be raised by
a state general property tax calcu-
lated to be % cents on the hundred.
unless the other counties come to San
Francisco's rescue.
The professor stated in The Call that
IL there were no state property tax We
would save is cents per s100 under the
new plan. But II there be state
tax of % cents, then our final balance
for this year will be a loss OF cents,
or in other words. the present rate
would be s1-94 instead Of $1-9O. Trans
forming the gross receipt tax OF the
corporations into an advalOrem property
above that their rate would be s152.
The amendment proposes that this IA
vorable rate shall never be Increased.
although the general property rate is
constantly going up.
In New York state and I'm Pennsyl
vania the fixed gross receipts tax has
long been in vogue. In the former
there is no general property tax for
state purposes. This has been ac-
cOmplished gradually by a vicious sys-
tenn of license taxes. which equal So
147 900, while the corporation taxes
amount to only s7,033. 900. Professor
Plehn suggests a California state
liquor license tax to yield $75O.0OO. and
other business license taxes. The
amendment is craftily worded. 50 as to
make this possible. II the corpora
tion rates are all sufficient. why this
suggestion from him? (See pages 13
and PSI Of his report)
The establishment OF an inhexiblez
tax rate on corporations removes them
from all concern in the honesty OF pub
lie expenditures, state, county or mu-
nicipal. Government economy can not
reduce their tax bills, graft and waste
can not raise them This accounts for
the monumental graft that hourishes
in New York and Pennsylvania. The
contract for building the New York
subway was awarded to a political ia
vOrite, who subIet 1t at profit of mil
lions, and when completed. the city
practically donated it to a special
privileged corporation. In philadelphia
the S2,500,000 offer OF John Wana-
maker for certain franchises was re-
fused and the franchise donated to a
grating corporation. In furnishing the
Pennsylvania state capitol two ros-
trums. which cost the builder s2.O6O
were sold to the state for S9O.747: the
state paid s2,072.45O for metal hline
cases costing s412.5OO. There was
squandered ss,5sS.74O for furnishings.
These steals were winked at by those
paying fixed rate of tax. Their OK
was not gored- Indeed he was actually
fed. for government extravaganca
meant the discharge OF political debts
without an increase In corporation
taxes.
The tax amendment proposes TO es-
tablish new special privileged class.
composed almost entirely OF corpora
uons, who shall never have their tax
rate increased. This class in the past
mas practically dominated our state
Legislature, county supervisors and citv
councils. Under our present system
these corporations have a selfish inter-
est IN opposing public waste or graft.
Are we going to remove the safety
waive and encourage them to help them
selves at the public pie counter. whila
we foot the increased bills?
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and assistance Of the merchants and