The New York herald., 1922-02-04

tax. as well as a local real property
tax. The use OF now one and now the
other, or OF a combination OF several.
upon the same public utility results
in gross discrimination as between
classes of public utility corporations
as well as between corporations within
the same class.
1--WE propose 10 wipe out all these
complicated forms and substitute "a
single simple form OF gross-nct tax.
applying the net income tax whore
that is possible among the more sue
cessful public utility corporations and
n gross tax where that on the whole
is more convenient and just, the OBJ
ject being TO make each public utility
corporation bear its just burden but
bear it under a simple, straightforward
rule.
This may not be franchise taxation
within Mr.. Seidmans meaning OF the
word, but it is taxation all the Sanc
and works out more fairly and Justly
for the public as well as for the utility
corporations. AS a matter of fact the
struggle of these corporations An tho
courts to prevent the present tangled
and unjust system from affecting them
too unfavorably has been very oxpcn-
sive from the standpoint OF litigation.
both for the State, which has 60 de-
fend the suits. and for the corpora
tions. This is very wasteful 10 the
State as well as TO the public generally.
'Mr. Seidman appears 10 think that
IL the technical tax on the franchise
is gone, everything Is gone. This of
course is not the case. II you can
benefit both the State and TIC ccrpo-
ration by n simpler and more just
form of taxation IL would appear that
the theory about taxing the franchise
ought to go by the board and some
other method be adopted. That a.
what we propose.
"As to whether public service cor
porations ought to pay greater tax
than the ordinary corporation. times
are changing since Mr.. Seidman's the
ory arose of taxing the monopoly
which public service corporation en-
joys with the consent OF the state.
Now we are restricting tho profits OF
the public utility monopoly very
closely and the public service commits
sions are permitting the corporations
10 add their taxes 20 their expenses rs
a factor in determining what their
rates for service should he. Under
these circumstances certainly the pub-
lie utility corporations. like tho tole-
phone or gas and electric corporations.
may shift their tnxes 10 tho corsum-
ers entirely in the form OF slightly
higher rates for service. but they
themselves are definitely restricted ns
TO the height of their profits. SO this
sort of public utility corporation under
present conditions has pi practically be-
come only a tax collector.
Another kind of public utility like
the electric railway, In our State Is
having its rates of charge pretty def
initely determined by some contrac-
tunl agreement, as the five cent fare
agreement, or by public opinion as
TO what street car ride is worth.
Under these circumstances such a cor
poration cannot shift its burden and.
as compared with other public utili-
ties, is very badly treated in this Sta.c
by taxation.
1--WE have to differentlate between
public utility corporations and tax
them on q different basis from the
franchise basis In order TO bring rev
onue to the State and justice TO the
corporations"