Daily Kennebec journal., 1917-02-15
ParIor Car Tax.

Coi1lo derived from DuSllleSS uoHc
wholly within the State. l recommend
change to the same method as is
now in force in the case of telephone
companies: that is. an assessment
upon all the gross receipts collected
within the State. This would give
probably s1750 additional revenue in
1918.
Telephone and Telegraph Companies.
I suggest the following increases in
the rate of taxation based upon the
gross receipts of telephone and tele-
graph companies:
Between $4,000 and S1O,0OO, IRON l.
per cent to per cent.
Between $4,000 and $4,000, from II
per cent to p per cent.
Between $4,000 and $4,000, from
per cent to per cent and so on, IN
creasing the rate of tax one-quarter OF
one per cent for each additional S2o'-
600 or fractional part thereof, up 10
limit of seven per cent instead OF siA
per cent as at present. This chanse
would give S20,172.19 more revenue on
the basis of the present gross income
Railroad Companies.
In the case of railroad companies, L
suggest no change in the sliding scale
of taxation upon gross receipts per
mile of track except the increase OF the
limit from 81 per cent to six per cent.
This will affect only those rallroaus
enioying the largest income per mile OF
track and in case of lessened receipts
the tax will be correspondence dc
Lcreased. The probable increase IN 1910
.,f % Z,
$S2.515.12.
Repeal of Railroad Tax Distribution
We levy State tax upon rall'"o9'
telegraph and telephone companies "I'
exempt them from local taxation eAetp.
upon real estate outside their pole INES
and rights of way. This method Of taAa-
ton is based upon the sound theory that
the value of these properties depend
upon the business activity of the whoie
State. Not only the city or town through
which the railroad track actually runs,
but also the remote village by furnishing
it's share of freight and passenger traffic
adds it's own quota to the value of the
railroad companys property.
One section of this law provides how
ever, that an amount equal to one per
cent. of a fair value of the stock of eacn
railroad, telephone or telegraph COM
pany shall be returned to the cities AMI
towns in Maine where the stockholders
happen to live provided the amount shall
not exceed the total received by the
State from any such corpordt.ln The
amount required for this purpose for
each of the years 1917 and 1918 is estimat-
ed at s225.000 and may go considerably y
above that figure for 1918 If any part
of this tax were to be returned by the
State to the cities and towns. it woul
seem more equitable to distribute It IN
proportion to the property of the corpor-
alton actually existing within the limits
of the municipality. | believe the entire
tax should be retained in the State treas
ury for the benefit of the whole people
of Maine.
In considering the effect of the repeal
of this law upon any particular city or
town ask you to remember that the Law
amounts to tax OF about half mill
on all Of the people Of the State. No
city or town is really benetiting by It,
that does not receive more than an
amount equal to a half mill tax upon its
valuation. Less than % cities and towns
are receiving from this rebate more than
one-half mill upon their valuation. Let
me urge the representatives of those
particular cities and towns to bear in
mind that without this indirect taxation
program, of which the repeal of this re
bate law is an essential part. tax ra t.
of at least six mills will be necessary in
nd nl,aI I1..
in 1917, instead of the five mill rate pro
posed in this budget. If the alternative
is a six mill rate in 1918 only. there are
but six cities and towns which can afford
to insist upon retaining the rebate law.
For example the city of Portland al
though receiving a considerable sum of
money under the rebate law would gain
about 5000 in 1915 through the repeal of
the law combined with the tax rate of
five mills instead of six If the a!terna.
tive is a six mill rate for both wears as
may easily happen if this budget pro-
gram is not rigidly carried out. only one
city and one town would gain during the
two years by retaining the rebate Law.
Taxation of Intangible Property.
l do not intend to argue this question
beyond the expression of an earnest hone
that you will resolutely set about enact
ing one or the other of the proposed
methods of providing for an honest and
fair tax upon intangible property AT
my request five distinguished citizens of
Maine have made careful study of this
important subject. Their report is at
tached to this message rs APPENDIX
e. / want you to understand and ap-
preciate as / do the unseltsh and devoted
spirit in which these busy men have
made careful painstaking investigation
without compensation and at their own
expense. Their conclusions are worthy
of your careful study. l hope that you
will first decide to adopt some form of in
tangible property tax at this session and
then proceed to choose either the fiat
rate or the income tax as your Judgment
may dictate. Good results may be ac-
complished by either method. The great
danger of prolonged discussion between
the two methods is that neither may
finally be adopted.
Some part of the tax thus collected
probably one-half should be returned to
the city or town In which the taxpayer
lives. Not only will the State receive
large increased revenue estimated at