Daily press. [volume] (Newport News, Va.) 1896-current, 1910-06-01
HOW THE TRUST "covERsy THE
NEW LICENSE TAX.

Defending the action OF tne ouu'n-
eastern Underwriters Association in
arbitrarily increasing fire insurance
rates In this city ten per cent, re-
representatives. OF the Trust declare
that 1t Is the invariable custom OF
their combination to make rate in
sreases to meet excessive taxation
.he Trust itself being the court Of
last resort In the question of wheth-
er its taxes are reasonable or exces-
siye.
Let us see about the facts In New
port News. Basing an estimate on
IS companies, having gross prem
ium incomes aggregating 100000 an
nually, under the license tax rate Of
last year, $3.50 for each company,
Nexport News received In license
taxes $3.454, or rs percent OF the
premiums. Under the new schedule,
imposing a specific tax Of S25 and 8
percent. OF the gross premiums upon
each company, the city will receive a
total OF $1,000, II all IS companies
continue to do business here. In other
words, the city will receive in taxes
ga percent of the gross premium in
come, instead Of rs percent. as here
tofore. This is an icnrease of SO per-
cent. or s4.soc.
Now, In order TO "cover" this in
crease of SO percent. in taxes, the
Trust adds 10 percent. to its rates,
which, II the same amount Of insur-
ance is written, will mean $4,000 adj
citional transferred from the public
TO the Trust. But" say the Trust
representatives, when We have de-
Quoted the cost of doing business, this
10 percent will just about onset the
additional tax" Make a calculation
or two before accepting this state
mcnf. The combined city and State
license taxes amount to about per
cent, - TIE agents commissions TO
10 80 ~ fou the t&Id <l--Vt'
dedecf rperccnt. s2.76s, and $3.50
Is sefk} esides the taxes and com
mlsssonst the added cost OF doing
business on account Of this 10 per-
cent. Increase is nothing. So the
rrnzt adds $3.50. net. to It's income
/ to cover the $4,000 additional II must
p1y to the city. This Is the simple
bus;ress proposition OF increasing
rates to cover" increases in tax
alton Surely no one will deny that
the city's increase was very thor
oughly covered"
II Is not claimed that the license
tai In Newport news Is not above
the average, nor can the Trust re-
presentatises attempt to deny the OBJ
vious fact that profits from the IRE
insurance business in Newport News
are FAR ana away in excess OF the
average But. however this may be,
because other cities are content to be
oARooozled by the Trust : no con,
elusive argument that We should be
ccuzIly a. badly used
Al least one city IN Virginia i'm
poscs license sax thai Is considersb
" higher thsa the tax prescribed II
the iocsi ordnance which sss mad.
he excuse for increase rates. Pet
srsburx imposes Cat tax of siz5 !
sesr OF each agency Of each CON
pay. ana IN addition a quarterly "a
Of sLfs on each sfce Of gross prem
:u0z u there are a. many cDmpanic
5osrz business IN petersburg - a-er
are here. and the sane anount q n
<or>nc< = written. Pcicrshurz coiiec,
1850 iE specific taxes and <isss :
onert<rty assessments. o. a total Z
<zr1<s snnr,i.s- u rcfcrsturr pens
80 for fr1pceinE mis- tar who
xr@<tl> exc><ds hat which h bel