Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-04-14
Street Railway Equities.


gress to substitute q tax on the net
earnings Of street railways for the
present tax on gross earnings is sound
in principle. 1t substitutes fairness for
unfairness IN taxation. 1t ought not
to be proposed solely as tenn.
porary punitive expedient tending by
Its confiscatory terms to compel
merger OF our two street railway sys-
tens. Ii should be urged on it's merits
imposing after merger only a reason.
able tax rate. as a permanent sub
stitute for the grossly unfair gross
earnings tax.
This change in form Of basic taxa.
ton will correct one of the two OBJ
vious causes of existing chaos in the
street railway situation. The other
cause Of street railway fiscal chaos is
the fixing OF a fat rate of car fare
on both systems regardless of the dis
lance over which the passenger is con-
veyed.
The term gross earnings" is mis-
homer. one does not know that there
are earnings until he subtrscts ex-
penses from receipts and finds bal
ance. II one Of two taxpayers with
the same annual gross receipts is COM
pelled to pay out to meet expenses of
securing this revenue all OF or more
than the aggregate receipts, while the
other taxpayer, favored by conditions
and not by superior business manage
rnent, secures the same revenue
through the payment OF fraction of
the receipts, then the gross earnings"
tax taxes equally insolvency and pres
perity, charging as much against him
who has not as against him who has.
A similar inequity is found in the
payment OF a fiat rate of car fare ir-
respective of the mileage of trans
portation OF a passenger. The latter
does not pay as he should for what he
gets. A street car system with large
suburban Improbable trackage con-
veys the average passenger over
much larger mileage Of track than the
car system almost exclusively com
posed of urban trackage. If the same
fiat rate Is charged all passengers on
both roads the former evidently rem
ders more service for the same money
than the latter. Also the former is
compelled TO make greater OUTLAWS to
meet the expense OF operating this
much larger Improbable trackage. It
results that the same fiat rate Of fare
to both street railways. departing
from the only sound principle of pay
ing for what one gets, may bring good
dividends to one system and bank
ruptcy 10 another.
Street railways are in the business
OF transporting passengers for a price.
They sell transportation, and equisably
they should be paid In accordance
with the quantity and quality Of trans
portation which they sell.
To compel one road with excessive
suburban Improbable trackage to
transport the average passenger very
much farther than the transportation
OF the average passenger by another
road for the same fiat rate Of fare is
as inequitable as to fix fiat rate for
leaves of bread, charging the same
price for loaves OF eight, ten, twelve
OF sixteen ounces. It is as ineduitable
as it would be to charge a fiat rate
for passengers on steam railroads
which. for example. should be the
same on a road which ran to New
York as on road which ran only to
Philadelphia. .
Gee 1t is impossible to work out an
equitable solution Of the street railway
problem II these gross basic inequities
are ignored in the calculation.
Let US hope that in the end Con-
gress will enact system Of taxing
street. railways which will cure the
present evil OF exacting heavier taxes
from \ company which earns little
than from a company which earns
much. 1t will be in accordance with
equity IL this change Of basic tax is
made not in way to punish unduly
or to confiscate from the profit-earning
company in order to drive it into re-
iuctant merger, but in a way to re-
1ieve the non-prof1t-naking company
Of some of it's burden Of taxation upon
what il has not and some OF it's losses
due to the fact that the law compels
IL to carry the average passenger for
the same rate OF fare very much
farther than the average mileage Of
the average passenger on the other
street railway.
It is difficult TO give concrete ap-
plication to the equity which requires
that the car fare paid shall be directly
and reasonably related in amount to
the mileage or quantity Of service
rendered. The obvious suggestion OF
this equity is OF simple coming sys-
tenn. which shall exact the same fiat
rate for transportation over the paral-
Iel;ng competing urban lines Of our
two street railway systems, and which
shah require the payment by the sub
urban passenger on both systems OF
small supplemental fare for extra
transportation.
But neither the local community nor
che street railways desire the coming
system. The advantages Of the fiat
rate system in developing suburban
areas and in minimizing urban conges.
tion and SUM conditions are held to
the superior equities OF the
zontng plan. But IL in the community
suburban transportation is to
be furnished unprodtahly at an un-