Evening star., 1922-03-07
More Drastic Measure Urged
Upon District Committee
by Commissioners.
HEAVY LEVY ON INCOME
EXCEEDING 7 PER CENT
Draft of Bill Submitted Shows in
Detail Effect of Plan on
Companies.


tax measure to force the street rail-
way companies of the District to
merge, and have transmitted their
recommendation to the Senate Dis
trict committee.
The new proposal is that a tax of
so per cent be imposed upon the
operating income of the companies
in excess of 6 per cent and not ex-
ceeding per cent;
That a tax of rs per cent be levied
on that part of their operating In
come in excess of per cent.
The original proposal of the Com
missioners provided merely for a tax
Of so per cent on operating income In
excess Of 6 per cent.
Committee Meets Tomorrow.
The Senate District committee. when
1t meets tomorrow afternoon. will
have before it this new proposal for
consideration, as we'll as the original
plan advanced by the Commissioners
The committee already has a bill on
the Senate calendar which authorizes
the merger Of the street railways. and
Senator Ball. chairman of the COM
mittee. a few days ago introduced an
amendment to this bill containing the
original tax plan submitted by the
Commissioners The committee will
consider the advisability of adopting
the new and more drastic plan.
The Commissioners in their letter
to Senator Ball proposing the revised
plan say:
stand of Commissioners.
1.-The return to the Capital Traction
Company tunder the original plan)
would have been 9.12 per cent per an
mum, and to the Washington Railway
and Electric Company. 6.s5 per cent.
with return on the combined fair
value Of their properties of 7.93 per
cent"
These figures are for the calendar year
1921.
The Commissioners continue:
THE earnings OF these two companies
can be brought still more closely to-
gether. iowever. II this tax provision be
per cent on that portion Of the operat.
ing income in excess Of per cent and
not exceeding per cent. and a tax OF
IS per cent on that portion OF operating
income in excess Of per cent return
The effect of a tax provision o; this
nature for the calendar year 1921 would
have been to the Capital Traction Com
pany 7.80 per cent and to the WASH
ington Railway and Electric Company
6.s7 per cent. difference Of only ap-
power.
Under the provisions Of the bill
already submitted by US (the ori-
ginal proposa) the increase in the
amount OF taxes to be paid by these
ega aompea'es on 1871 on Is 81 1ssis
the above suggested notifications
are adopted the amount of the tax
would be increased to $412,975.17."
Draft of Bill Submitted.
The Commissioners submitted with
their letter Of recommendation the
draft of a new bill dealing with this
matter. and also statements showing
in detail the effect Of their proposal
on the companies
The statement relating to the Capt.
tai Traction Company showing the
effect Of the proposed new and more
drastic tax, when applied to the cal
endar year 1921. Is based on the fair
vau Wairbed 81 1871 using
The gross revenue for the year is
given as $5.501.2Oo.35: operating ex-
penses and taxes. 1874, ,260.48, less
taxes on gross receipts. $217,546.79:
operating expenses less taxes on gross
come year ended December 81, 1921,
$1.924. 1855; per cent return on
fair value. $1.101,395.53: operating in
come in excess OF per cent return,
$S23,091.13.
Amount of tax under proposed law:
n ivr of e
cent and more than Z per cent on fair
value, $157,342.21; deduct SO per cent,
$IS.671; operating income in excess of
z per cent return, $s23,0s1.13; deduct
rs per cent. or $20o, ,772.7S, leaving
$Sd7'SllSS.sS' making a total tax Of
Operating Income.
Operating income-year ended De-
cember 81. 1921. $1.s24,4S6.6s less
amount Of proposed tax, or $685., 6,sss.46.
leaves operating income available for
return amounting to $1,22S,49720, or
a return on the fair valuation Of the
road of 7.80 per cent. The tax under
existing law on the Capital Traction
Company is $217.546.7s, and the in
442.67.
The statement submitted by the
Commissioners with reference to the
Washington Railway and Electric
Company and subsidiaries is as fol-
lows:
Fair value Of the company and SUBJ
salaries as Of December 81, 1921,
using weighted average. $17,236, ,409. S..
Gross revenue for year ending De-
cember 81. 1921. 095,136.53. Operat-
ing expenses and taxes, $5,010,349.1O,
less taxes on gross receipts amount
ing to $241.s14; operating expenses
less taxes on gross receipts, $4,76s.-
034.56: operating income year ended
December 81. 1921. $1,326,1o1,9 81: 7 per
cent return on fair value OF COMPANY.
$1.2o6, 548.S6; operating income in ex-
cess OF Z per cent return, s119,553.31.
Proposed Tax Amounts.
Amount of tax under proposed law;
operating income in excess of s per
cent and not more than z per cent
return on fair value. $172,364.0s; de-
duct so per cent, $s6.1s2.04; operating
income in excess of z per cent re-
turn. S119,553.31. deduct rs per cent,
ing total tax of $175,si7o4.
Operating income year ended Decem-
ber 81. 1921. 31,326. .101.s7, less amount
OF proposed tax. or $175,S47.04, leaves
operating income available for re-
the fair value Of the road Of s.s7 per
cent. The present tax is $241.s14. and
the proposed tax. $175.s4S.04, or a re-
duction in taxation of ss5.4s7.5o.