The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1909-05-19
TAXING OF CORPORATIONS.

! Herbert Knox Smith, Commissioner Of
! Corporations, has issued a report Of real
and high Importance to the whole coun-
| Try. on the taxation of railroads. 1t
deals chiefly with the way in which
railroads arc taxed by the New Eng
land States
II seems from this that Vermont and
Connecticut derive enough revenue
from railroad aud other corporate tax
alton to practically pay all State OK
pcnses, Vermont places her taxation
of railroads upon gross earnings; Con
necticut upon tho sum Of the bonded
debt and the market value of the stock.
Maine derives large sums from charter
ing corporatious and also taxes rail,
r9ads n graduated percentage of rail
road receipts New Hampshire taxes
the railroad property, through State
board, Massachusetts on the market
value Of the.stock, above the valuations
made by the local assessor Rhode
Island as in New Hampshire
There are good features in all of
those propositions. but the principles
underlying the imposition of The diff
fercnt forms of taxation vary widely.
from the direct tax on values in sight.
TO the levy of lax on earning capacity
without reference to visible values.
OF the former, that of taxing the
values in sight, il appears 10 us that
the Connecticut system, of computing
the valuations on the basis of the av-
crage value Of the stock and bonds
for the year, is the most simple. direct,
and accurate. II takes the market
value of the securities of the roads as
fixed by the actual selling prices in
cluding both stock and bonds. There
could be no possible rule of valuation
more exact or practically sure than this.
Ii wrlngs out the water, and puts both
stock and bonds on the true commercial
basis. But of course whore tho rail
roads are so assessed. fairness requires
that other taxable properties be as
scsscd also at their true commercial
value
The systems Of taxation in some
OF the other States are based
on earning capacity, without consider
ing the value of the material property
IN sight, good and dcfcnsible propo.
sltion, but widely different in principle
from the plan of taxing values as
appraised on visible property 1t would !
be interesting to have thorough and
impartial analysis Of the practical /
working of these different principles. /
TO ascertain whether the results are
widely different or substantially equal !
In amount of taxes paid, proportionatcly |
TO money invested, to earning capacity. !
and 10 the actual value of the visible |
property.
The taxation of corporations (in most
cases meaning chiefly railroads. is one |
not very well settled. but more and |
more is becoming better understood. AS |
seen IN two of the New England States. ,
the revenue from the corporation tax
pays the States expenses. II is the |
same IN New York. And with the |
amazing growth of corporate activity !
and the turning Of business so LARGELY |
INTO corporate form, thc importance of !
corporation taxation becomes more Wv. |
IDLY realized In most of the States.
aonbtIess, the corporation tax would !
supply sufficient revenue to pay the cx- !
penses of the State government. Ieay |
ing the property valuation tax for local |
purposes alone, Bnt in most of the !
states there would have to be amend |
ments of their constitutions TO allow
Of this being done.