The San Francisco call., 1908-10-12


sion, in favor of the proposed tax
amendment, would have some
weight. were # not for the fact that
he frequently contradicts himself and
misstates facts to suit his purpose
In The Call, October 4, 1908. the pro-
fessor said: IF it goes into effect IL
will nearly double the taxes on steam
railroads a" In his article in
the bulletin of the Commonwealth club
for May, 1908, page 145, we read: The
taxes now paid by the railroads are
equal to 1 per cent on gross earnings,
the full amount recommended by the
commission" If they are now paying
the full amount recommended by the
commission, how is there to be any
doubling?
He states that the taxes on street
railroads will in most cases be dou-
bled and in the most moderate instance
stance of doubling. but attempts to
prove a one-seventh increase on the
United Railroads. Owing to the strike
of last year the roads income was
seriously reduced. and Dr.. Dodge cor
respondingly reduced their franchise
assessment this year. For the pur-
pose of considering the eject OF the
proposed amendment. DR.. Dodge says
it is fair to average the assessment
of the United Railroads at $2O,000,0O0.
and their gross receipts at $6,OOO,00O.
The tax rate this year is $3.50 per
$100. Under normal conditions, there
fore, the taxes OF the United Railroads
would be $360,000, to which must be
added about $4,000 car license tax
The gross income tax of per cent
would amount to only s24O.000. These
are the statistics which the professor
calls false and misleading
In The Call Professor Plehn writes;
The rates have been carefully com
puted so that they Will equal 1 per
cent on the ttrue valuation OF the prop
erty used by the corporations, which Is
exactly the average paid by other prop
erty." Compare this with his state
ments in the report of the commits
sion on revenue and taxation, page 80:
1T is practically certain that farm
| ing lands are assessed at 60 per cent
of their value. making the taxes on
this class OF property on the average
| LA per cent of their true value, and
| on page 23s: Real estate I'm cities Is
| assessed for purposes of taxation at
about so per cent of it's value The
| taxes real estate are, therefore.
about 1853 per cent on the true value.
From IA per cent TO SO per cent OF
the favored corporations. The larger
| percentage of gain will usually pre-
| vail, because most Of the property Of
| these corporations is located in cities.
| In The Call the professor says: In
one group are to be the general run
of small property owners, who shall be
| taxed according to the old method, but
| for local purposes only. In the
other group are to be the above
named classes corporations. who are
to be taxed for the support of
/ the state only. The amendment
plainly provides that the corpora
tion sross receipt taxes shall be "ex-
| clusively for state purposes and .'in
lieu of all other taxes and licenses.
state. county and municipal" but it
makes no provision that the small
property owners under the old method
shall pay taxes for local purposes
| only and in lieu of state taxes" On
the contrary. the amendment continues
| in office state board of equalization. ."
whose duty it is to perform such
] duties in relation TO taxation as the
! legislature may prescribe" The legis-
| lature has already prescribed that it is
the duty of this board to levy state
taxes upon all the assessed property
| In the state The amendment, there
| fore. does not separate state from local
sources of revenue. nor does it remove
/ the necessity for equalization.
| In regard to the ease of determining
| the proposed gross income tax, Pro-
fessor Plehn says the state board 'will
simply apply mathematical rule. null
! tiplying the gross receipts by four.
There is no room for difference
of opinion, no dependence upon esti-
mates. In the face of this our super
visors. after several months of DELAY
and investigation, have compromised
with the United railroads on their gross
receipts percentage due the city upOn
certain franchises, and Wisconsin is
suing railroads for gross income taxes
lodged 10 years ago! Mr.. Sullivan is
amply justified in fearing that our
state board of equalization will accent
the corporation figures for their gross
receipts, without any investigation.
By falsely assuming that the amend
| ment will not permit the fevy of a gem
| eral property tax on focal property. for
state purposes, the professor estimates
that San Francisco will save s712 O40
| by the amendment. We have shown
above that the amendment in reality
contemplates state tax on local prom
erty. The question is, how much win IL
| be? This can be answered only nv
determining how much the corporations
will actually pay under the new plan.
The state requires certain amount
of revenue and, whatever deficiency
exists after collecting the corporation
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and Rolls oJrb x,,;1t