The Bridgeport evening farmer., 1915-03-26
WOULD PUT STATE TAX ON. UTILITIES
 PRlvATELY-O NED
Bill Provides for Two Per Cent. Tax On Gross Earnings
 of Companies.


 companies of this type.
 Although practically all of the com pauy officials present were in oppos4- 5tion to the bill, which bases its tax. on the gross earnings of the companies, most of them were in favor5of a tax upon net earnings.
 The bill discussed yesterday puts two per cent. tax on the gross earn ings- of all water, gas, electric light, power and heating corporations.
 Tax Commissioner William H. Cor bin said that the bill was only one of a. number of measures intended to distribute the burden of state expense over all the industries of the state The bill is not intended to apply to mundcipally owned companies. These compantes,'' he said, fare what I would call semi-pubIic service corpora tions and differ from other conner cial organizations in that they enjoy special privileges in the way of fran ch1ses and in many cases are partial or full monopo1fes. For this reason they have been singled out for spe- cfal attention. In the case of water companies the state is contributing g to the Companies some valuable nat ural rights The basis of taxation of public corporations in most states is that of gross earnings or ad vaforem. The former is much simpler. Con- neeticut has placed express, special
 
 gross earnings basis. Three different rates were put on these three classes of corporations. The lowest of these is the one found in the proposed bill.
 .sThe advantages of the gross earn ings are: That it is automatic on ac- count of. the reports made to the pub- lie utilities commission, that payments of taxes are made only when there is ability to pay, and that the people who profit by the tax are those who pay it in the long run. The companies can increase their rates if necessary Indirect taxes are always the most popular.
 s'The two per cent rate seems req sonable. The, state can rely upon a revenue which is practically fixed though it would ductuate a, little. I think the local real estate taxes should not be deducted unless the rate is higher
 In answer to a question, MT Corbin estimated the receipts from the pro- posed tax of $20o,O00 8 year. Judge William F. Henney said he thought some of the total taxes under this law added to local taxes. would amount to five per cent, which Mir. Corbin ad- nitted would probably be the highest in the state. Colonel A. Heaton Rob ertson for the New Haven Gas com pany said that his company was al- ready paying seven per cent on it's gross receipts and it would be nine per cent. under this bill. Colonel Robert son admitted, however, that his com pany was paying eight per cent. divi- dends in spite of the tax. MT, Corbtn if the bill were passed, be specifically exempted fronE,the proposed corporate excess tax
 Samuel Ferguson of the Hartford Electric Light company said he thought the tax would favor small
 
 price in contrast to large companies which do large volume of business. at a small margin of profit. To each of these objections MT. Corbin said that one solution of the problem would be to charge the tax to the consumers by charging more for the products. He said that in the long run those at the bottom of the pyramid had to bear the weight of taxes and he thought an in- direct tax on gas, water. electricity. etc, would be much more popularly re- ceived than a direct state tax on reel estate which would have to be paid in addition to the high local taxes now. in effect.
 Arthur c. Graves of New Haven said he didn't think the rates could be raised to meet the increased tax, as the power which set the tax could would have to appeal to the public utilities commission, which had not been known to give such permission in the past. MT. Corbin said that he thought the commission might be jus tihed in granting such an increase. He added that he did not think 1t would be necessary in all cases to increase the rates, but said that all but two of a list of corporations he had paid eight per cent. dividends and could meet the tax out of it's dividends.
 E. A. Hartman of New Haven said haf q ina fo tween cities which had municipal wa ter supplies and those which did not Hartford, with municipal water sup ply, would not share in the payment of the tax while New Haven, which had a. private water supply, would have to pay the tax and it's citizens would have to pay the tax, indirectly, through increased rates He intro duced a substitute bill modelled on the federal war tax putting two per cent direct tax on the consumers, the state to collect two per cent. of each bill submitted to consumers whether pre- sented by municipal or private com panies. T have been to1d,'' he added that there is no possibility of such a bill passing because 1t would be un- popular, but justice is more important than popularity
 J. E. Keeler, treasurer of the Stan- ford Water Co, said it would be hard for the companies to readjust the rates so as to shift the tax burden onto the shoulders of the consumers, but result in reducing the quality of their ser vice.
 Colonel J. Moss Ives of Danbury was also in favor of a. tax on net earnings in preference to a tax on gross earn ings. He said that one of the conn panies he represented, the Rddgefield Water Co.,, had not paid 9, dividend since it's organization 15 years ago.
 The hearing closed with the an- nouncement that Judge HenneyA was arranging for a conference of the var ious corporate and other business in- terests of the state to frame 9 tax bill that would be acceptable to all the in dustries involved.
 More than two dozen Americans with fhe first Canadian contingent nn