The Detroit times., 1909-05-17
SAYS BANKS ARE
BIC TAXPAYERS
Commissioner of Corporations Smith
Submits His Report on System Of
Taxation in New England.

WAOtlNIlONsM may IL nd uIsS
installment OF results OF an inquiry
ny the Bureau OF Corporations, into
the system OF state taxation OF manu-.
featuring. mercantile, and transporta-
lion corporations, throughout tho
United States. was published today by
Herbert Knox Smith. Commissioner OF
Corporations. Ii IL devoted to tho
New England states.
In his letter OF transmittal to Pres
ident Taft, Smith comments upon the
wide diversity In these forms Of taxa
lion In the various states. and tho
fact that administration Of the cor
porate tax law ranges from q system
mighty 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 frst factor In the problem OF state
revenues. The taxation Of individuals
Is substantially the same throughout
New England. Corporate taxation. on
the other hand, shows wide diversity
10th In theory and In practice lndi-
yiduals are taxed on property. Cor
Porattons are taxed on property. or
on income. or on combination OK
both, or ON capital stock, either par or
market value, or occasionally-as In
the case OF telegraph and telephone
companies-on mileage or number or
instruments. Administration ranges
from q system highly developed. hand
ed centrally by state officials with
large powers, to no centralized admin
ITERATION whatsoever.
Particularly interesting Is the
Massachusetts taxation OF corporate
excess" on the market value OF stock
less property otherwise taxed, and ap-
piled to all domestic corporations.
connecticut applies this to railroads
adding also their bonded Indebtedness
as a measure OF ability to pay taxes.
Railroads are among the largest
taxpayers. In Maine they are taxed AT
a graduated percentage of gross trans
portation receipts: In New Hampshire.
On property, but through state
board; In Vermont, upon gross earn
lngs; In Massachusetts. by the state
IN their corporate excess" lmarket
value OF stock. less amount OF proper
~ taxed locally, and by the towns
on much OF their property; In Rhode
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,
such as street-railway, telegraph, teie-
phone, express, car. gas, and electric
companies, are most often brought un-
der special and new systems OF taxa
ton. Taxation OF public-service cor
porations on gross receipts Is growing
IN use. Maine and Vermont use this
largely: Massachusetts,. Connecticut.
and Rhode Island in part; but New
Hampshire not at all.
Massachusetts alone succeeds APP
probably 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 unsuccessfui
efforts to reach this corporate excess
I'm the hands of the share holders
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
tering corporations-nearly a quarter
of a million dollars annually.
New England has made consider
able advance in separating the sources
nj state from local revenue. support
ing the local jurisdictions through the
tax upon local property, and the state
government by taxes upon corpora
tons and inheritances. Vermont ana
Connecticut are the only states when
thus pay practically all state expenses.
in the other states the towns collecl
large amounts TO turn over TO the
state"