The Detroit times., 1909-05-18
SAYS BANKS ARE
BIG TAXPAYERS
Commissioner of Corporations Smith
Submits His Report on System OF I
Taxation in New England.

WASHINGTON, May fT.-fhe first
tnstallment Of results OF an inquiry
by the Bureau or Corporations, into
the system OF state taxation or manu-
\ featuring, mercantile, and transpefta-
\ lion corporations, throughout the
United States, was published today by
Herbert Knox Smith, Commissioner or
Corporations. IL Is devoted 10 the
s New England states.
3 In his letter Of transmittal TO Pres
ident Taft, Smith comments upon the
wide diversity in these forms OF taxa
ton In the various states, and tho
fact that administration OF the cor
porate tax law ranges from system
highly developed. and handled central
ly by state officials with large powers,
TO no centralized administration what
ever
Mr.. Smith says:
The great growth OF corporate
wealth has made corporate taxation
the first factor In the problem OF state
revenues. The taxation VI individuals
is substantially the same throughout
New England. Corporate taxation. on
the other hand. shows wide diversity
both In theory and In practice. lndi'
uduals are taxed on property. Cor
porations are taxed on property, or
on income, or on a combination or
both, or on capital stock, either par or
market value, or occasionally-as In
the case Of telegraph and telephone
companies--on mileage OF number OF
instruments. Administration ranges
from q system highly developed. hand
led centrally by state officials with
large powers, TO no centralized admin
< filtration whatsoever
Particularly interesting Is the
Massachusetts taxation OF corporate
excess" on the market vaiue or stock
less property otherwise taxed. and ap-
piled to all domestic corporations
Connecticut applies this to railroads
adding also their bonded Indebtedness
as measure of ability to pay taxes.
Railroads are among the largest
taxpayers. In Maine they are taxed at
q graduated percentage Of gross trans
portation receipts. in New Hampshire,
on property, but through state
Z board: IN Vermont, upon gross earn
1ngs: In Massachusetts. by the state
on their corporate excess" (market
value OF stock, less amount OF proper
~ taxed locally. and by the towns
on much Of their property; in Rhode
X Island. on real property by the local
authorities: in Connecticut. on the
sum of bonded debt and market value
Of stock.
"Other public-service corporations.
y such as street-railway, telegraph. tele-
y phone. express. car. gas. and electric
!, companies, are most often brought un-
der special and new systems or taxa
<tfon Taxation OF public-service cor
'porations on gross receipts Is growing
IA use. Maine and Vermont use this
1nrgely; Massachusetts, Connecticut.
and Rhode Island In part; but New
Hampshire not at all.
Massachusetts alone succeeds APP
precfably In efforts to tax specially the
manufacturing and mercantile corpor-
+. ations. This state taxes the corpora
ton itself on its corporate excess
\ through the state tax commissioner.
The other states make unsuccessful
K efforts to reach this corporate excess
IN the hands of the share holders
4 through local officials. Massachusetts,
receives over two millions OF dollars
from this source; the other FIVE states
very little
Banks, insurance companies, and
other financial corporations pay large
amounts. often exceeding the tax paid
By railroads. but they do not come
within the scope Of this report. except
In the comparison of financial results.
Maine alone OF the New England
states secures large revenue by char
torxng corporations-nearly quarter
s ~ Il million dollars annually.
New England has made consider
z kb1o advance In separating the sources
|aof ntoto from local revenue, support
lng the local jurisdictions through the
4 tn upon local property. and the state
Z novornment by taxes upon corpora.
IONS and inheritances. Vermont and
onnecticut are the only states which
kus pay practically all state expenses,
TIE pkher states the towns collect
40 amounts to turn over to the