The Bridgeport evening farmer., 1913-03-12
TAX RAILROADS
 ON BASIS OF CROSS EARNINGS
Recommendations of Special Commission
 Submitted
Uniformity of Taxation of Cor pOTatiOnS Would Result in
 $200,000 Annual Increase

Hartford. March 12IThe special commission on taxation of certain cor porations, consisting of Judge John J.
 Walsh of Norwalk, Prof. Fred R. Fairchild, of Yale, and Tax Commis- sioner w. H. Corbin, who were ap-
 examine into the system of taxation of all corporations paying taxes in the state, today, made their report to the General Assembly.
 The report is an exhaustive one, containing 256 pages and much sta- were held by the conisston in Hart ford and New Haven In addition, the commission attended the confer ence of the National Tax Association in Des Moines, Ia, in September, and also meetings of the Association of New England State Tax Officials held in Boston
 The commission stated that. Connec- ticut's system of taxing public ser vice corporations is decided hodge podge- There is different basis for each of the four classes. Railroads are taxed on what is known as the stock and bond plan with an ap- portionment for interstate companies on the basis of road mileage, with numerous and complicated deductions; express companies are on the gross receipts basis. being those derived
 
 no account being taken of any part of the receipts from interstate business; telephone companies are taxed at a flat rate under the number of trans mitteFs used in the state, together with an additional tax at an arbitrary rate per mile upon wires used for in terstate business Telegraph com pauaaa are taxed upon she mileage of wire at an arbitrary flat rate per mile
 e lieut. he's an opportunity at the pres eu4 time to take the lead in a move ment which may result in a long step forward toward uniformity of taxa ton of corporations among the New England states, by adopting a scf- enfiac and broadnninded plan of tax ing aII- public service corporations on a gross earnings basis. together with a fair method of propor-tionmen which could be followed by other states with justice to all and with particular ad- vantage for each of the classes of such corporations.
 The commission finds that the best method for taxing railroads is a gross earning tax. This method will lead to substantial justice to the corpora lions. Imposed at the S-4 per cent. it will yield a state revenue at the beginning somewhat greater than un- der the present system.
 The net result of the plan proposed by the commission is on estimated in crease in the state revenue of about $2O0, 600 at the outset. It is probable that in the future there would be a steady increase of revenue proportion al to the growth of the business of the companies.
 It is also estimated that there will be an increase in the town revenue. The proceeds of tine tax of the shares of stocks of banks, trust companies and stock insurance companies, own cd by residents of Connecticut, are paid back to the town where stock holders are residents. Out of a, total tax of q, ,OS7, SOP. n paid by these corpora- tions in 1912 there was thus paid ssse, ,72z or eo.79 per cent The estimated revenue from these corporations un- der the tax recommended by the com mission is $1, ,1O4, ,642.60. Assuming that the same per centage would have been l paid to the towns, the net result would be an increase of $5,71S.14.