The Detroit times., 1909-04-10
AD VALOREM OR
SPECIFIC TAX
Apponents Of Taxation Of Telephone
Companies on Ad valorem Basis
Claim Public Would Not Gain, But
As a Matter Of Fact Would Lose by
Change.

LANSING, Mich. April 9.-Studious
Investigation of the relative merit of
the specific and ad valorein taxation
in Michigan by members of the .egis
lature during the past few weeks has
resulted in a decided change OF front
in the attitude OF the legislators TO-
ward the long projected proposition
of shifting from the specific TO the al
yalorem basis OF taxation.
The legislators have learned from
their constituents that what posed al
a popular clamor for the change
was In reality a political hue and cry;
that II is not sound economically, and
that the rank and file OF voters are
not alone not demanding II. but are
either apathetic, not understanding IL.
or have expressed themselves TO their
representatives. as opposed to a
change.
The true import OF the ad valorem
bill on investigation shows that the
public and not the telephone and tele-
gfaph companies must bear the bur-
den in case the bill should pass.
The general taxation committee of
the house has from the very nature Of
the case given the bill the most con-
sideration and gone into IL to such
an extent that 1t is opposed to the
bill as IL now stands and is not as yet
ready to report IL out.
IL has been stated that by changing
the taxation OF telephone and tele-
graph companies from specific TO an
ad valorem basis II would increase the
h. cfa "a ot
These statements suggest the fact
that this $4,000 would correspond
ingly reduce the taxes Of the people
and the widow and orphans" Such.
however. are not the facts.
All taxes from telephone. telegraph,
railroads and similar corporations, re-
gardless OF the basis of taxation. go
into the primary school fund, accord
ing to the constitution. The primary
school fund can only be used in the
payment OF teachers salaries. Ii Is
also shown that the primary school
fund has at the present time consider
ably more than s4,000.000 on deposit
at the various banks throughout the
state TO the credit OF the several
Districts. There are school districts
where no school tax has been levied
within five years
Thus il is shown that by increas-
ing the taxes OF the telephone and
telegraph companies. it Will not de-
crease the taxation of the people This
increased tax must OF necessity go
into "A fund that Is already full to over
flowing.
In changing the basis OF taxation
from specific 10 adj valorem IL will
necessitate the state going TO an ex-
pense OF good many thousand dol
lars each year. 10 be drawn from the
general fund. In employing experts TO
inventory the properties of the sew
erai companies which means increas-
cd taxes TO the taxpayers. It also
means thai the assessed companies
will haze TO 60 to laT,;e additional
expense to procure this data and sub
nit II to the state each year which
means additional expense to them.
I with no benefits In return To them
or TO the state.
/ General property Of tn state Is as.
sessed at so 20 GO per cent OF IL
value III the telephone aud telegraph
companies are changed from a specific
tax basis (three cents on every dollar
Of gross receipts) the constitution re-
quires that they shall be assessed at
true cash value, or about twice az
much. This would be manifestly un-
/ fair 10 the companies concerned and
would place a serious restriction on
the future development " this bust.
ness. which means so much "a, the
10000 telephone subscribers I'm Mich.
igan. and especially 10 the independ.
ent companies who are operating uu.
der franchises which specify Just what
rates shall be charged -tAdvD