New-York tribune., 1922-01-26
Ask 100 Million
State Tax on
Private Capital
Davenport Committee Also
Favors Abolition Of Per-
sonal Property, Special
Franchise Assessments
SeckHighcrMotorImposts
Elimination of Exemption
on Securities Sought in
Report to Legislature

Abolition Of the personal property
tax, the snecial franchise tax, and tax
ing Cat per cent? private and indi-
vidual capital are three Of the recon-
mcndations which will be made to the
Legislature to-day by the joint legisla-
tive committee on taxation and re-
trcnchment, Of which Senator Fred
erick NJ Davenport is chairman. The
committee also favors higher taxes on
motor vehicles, especially heavy trucks.
Tax exports in this city estimate
that the proposed tax on private cap
ital will raise about $lO0,O00,00O IN
revenue Senator Davenport's bill to
carry the purpose of this bill into ef-
feet is retroactive, compelling payment
able on or before May /, 1922.
Would Abolish Securities Exemption
Senator Davcnport's committee
favors elimination Of the exempt on
from taxation Of securities, both state
and NATIONAL now exempt.
In order to levy assessments more
eouitably the committee suggests that
the State Tax Commission should be
provided with a small force of en-.
gineers, capable Of assisting the local
assessors in the difficult technical task
of valuing the properties of public
utility corporations.
The committee says that some of the
electric companies, bound by low
fare, have been literally taxed into
bankruptcy.
BASED on net income, the business
taxes on electric railways are nearly
four times as great as the correspond
ing taxes on manufacturing corpora,
tons" says the report If local real
estate taxes are taken into account
electric railways pay over 38 PEE cent
of their net income in taxes. rms is
nearly five times the tax PAID oy
manufacturing companies"
ut is evident" says the report, that
the state has been using the public
utilities to a considerable extent as
tax collectors, imposing upon them
obligations which in many cases are
justified only upon the assumption that
the extra burden can be passed on IN
HIGHER charges to certain particular
sections of the consuming public. Com
pletely satisfactory adjustment cannot
be made until the constitution Is
changed so as to make practical the
abolition of the so-caled special fran
chise tax, which was better adapted to
the closing years of the nineteenth
century, when the position of the pub
lie utilities, as every one realizes, was
verv different from that which obtains
to-day.
Constitutional Amendment Needed
"These special franchise valuations.
under the existing law. are classified
as real estate, and in many cases are
pledged by localities to the limits Of
the present constitutional debt provi-
sion. 1t therefore becomes necessary
to seek a constitutional amendment, not
extending debt limits, but providing
that the taxation of public utilities
under an improved state system, in
the yield of which localities shall
share, shall not operate to diminish
the borrowing power of these locali-
ties"
The committee recommends rea
sonablc tax upon the annual net in
come above $4,000 of unincorporated
business.
Asserting that the present charges
on motor vehicles in the state are low,
the committee recommends that they
be raised, especially the charge on mo-
tor trucks, which should be asked to
contribute directly toward meeting the
cost of upkeep Of the highways. The
committee also is inclined to favor a
tax on gasoline.