The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1921-07-29

In considering this plan, therefore,
let us not forget that the first thing
that would happen under 1t would be
a reduction of about $4,000 year
In District revenues.
This figure is arrived at by adding
together what each company paid for
the fiscal year ending June. 80, 1920.
CThe 1921 figures are not avaiiableD
Vital Point In Problem.
I have pointed out each day in dis
cussing these various plans that the
real cause of our traction problem Is
the existence of two separate sys-
TENS, one rich and one poor. This Is
vital point to keep In mind when
considering this taxation plan, for the
purpose of the plan is. at bottom. to
relieve the Washington Railway and
Electric Of the burden Ito IT. of pay
ing between 1926 900 ana $4,000 into
the District treasury every year.
The theory is that. by saving that
amount of money, the company will
have just that much more with which
to operate street cars. and will be
just that much nearer an ability to
live on the same fare which pays
the Capital Traction handsome
profit.
Now, let us look at what we would
GET under a law that put a tax on
NET earnings instead of on GROSS
RECEIPTS.
From the Washington Railway and
Electric we would get nothing, or prac-
tically nothing. From the Capital
Traction we would get SOMETHING.
Just how much cannot be exactly
stated. However, we do know little
about Capital Traction NET earnings.
based on the taxes 1t paid the Federal
Government under the corporations
tax law.
!. For the year 1920 the Capital Trac-
ton paid into the United States Treas
ury as normal and excess profits taxes
$254,821.99.
That was in addition to the gross
receipts tax to the District Of $216.-
39676.
II the net earnings tax, therefore.
were SO per cent. as has been sug.
gested, the District might reasonably
be expected to get HALF Of the net
indicated by the Federal taxes paid, or
half Of s254,sH.99, which would be
$127,410.99.
The Washington Railway and Elec.
trio paid in Federal taxes s42.851 SO,
80 II that were considered as ITS net
earnings the District might be ex-
pected to get half of that, under
net earnings tax, which would be
$21, 1854, which, added to what 1t got
from the Capital Traction, would be
s14S,S38.83.
Sum Might Be Wiped Out.
To this would have to be added two
theoretical sums-the increase In the
net earnings of the Washington Rail
way and Electric, as result OF the
S238, 013.49 1t would save In It's gross
49, - ov~t ~
cessive earnings now enjoyed by the
Capital Traction because of the present
high rate of fare.
This sum, however, might be wiped
out entirely certainly in the case OF
the Washington Railway and Electric)
IL fares were REDUCED-and we
must not forget that some plan which
will result in LOWER fares is what
we are searching for.
In view of this situation. feel
justified in reaching the conclusion
that the only positive, definite result
of the proposed change in taxation
would be a reduction in District rev.
enues Of about s450,000 and an in:
crease Of about s150,ooo--a net loss OF
about $500, 000-with no more prospect
exists today.
Incidentally, the saving to the
Washington Railway and Electric
would probably be insufficient to cause
II to look favorably on fare reduc-
ton scheme. Its operating costs for
last year, not counting its subsidiary
lines, ran s4,142, 1869, against opera
ting revenues of $5,37l ,307.SS, leaving
II s1,22S.s61.20 for depreciation, sink
ing fund. taxes. dividends and bond In
terest.
To add s23s ,o1S.4o what It paid last