Norwich bulletin., 1909-06-22
THE CONNECTICUT TAX METHOD

Part One of the report of Hon. Her. bert Knox Smith, commissioner of corporations, on Taxation of Corpora tions, has just been issued. This part of the report deals with the laws and systems of the New England states.
 The report shows that over four fifths of the total revenue for stata purposes in Connecticut comes from state taxation of corporations. In 1908 the total state expenses were nearly three and one-half million dol- lars, of which the corporations doing business in Connecticut contributed nearly three millions; and of this three millions the railroads paid over a mill lion, savings banks over half mill lion, and insurance companies over half million.
 Since the suspension in 1890 of the state tax on real and personal prop erty, there has been complete sepa- ration of the sources of state and To- cal revenue. One of the methods pro- posed for supplying an increase of state revenue is the re-enactment of the state general property tax.
 Another method proposed for in- creasing the state income is to tax the corporate excess of manufactur- ing and mercantile corporations. Such corporations. sometimes referred to as general business corporations" are at present taxed locally on property in the same manner as individuals. and therefore pay little. if anything, di- rectly to the state.
 The commissioner quotes from an address delivered March 10 last by Tax Commissioner Corbin before the Farmers association, in favor of this proposition.
 This recommendation means that manufacturing and mercantile cor porations would be taxed in the same way in which the state now taxes her railroads. Indeed, the inclusion of the bonded indebtedness as part of the taxable value of railroad company is unique, and is often referred to as the Connecticut method"
 Another unique feature of Connec- ticut's system of taxation, not espe- cially of corporations, is the so-called "chose-in- -action" tax, by which hold CTS of bonds, notes and other choses in action can pay to the state a low uniform rate of s4 a thousand in- stead of the regular local property tax of about s20.
 This attempt by the state to induce return for taxation of that class of property which is so generally con- cealed by the holders thereof through out the United States, namely, intan- gible property, such as national bank deposits, securities, and net credits, is unique. The deputy state treasurer of the state informs the commissioner that this tax is the only one of the kind in the country. This officer stat ed that undoubtedly a much larger amount was paid on this kind of prop erty under this low uniform rate than would have been paid under the local property rate, but that the receipts should be at least three times what they are.
 Bank depositors take advantage of this law. The practice is to get a certificate of deposit from the bank, and to mail or take it to the state treasurer. and ask to be taxed on such certificate at the 4-mill rate; and this is allowed. In fact, certificate is- sued by the state treasurer states that certificates of deposit are liable to this tax. and money in banks can be taxed in this way when certificates are secured"