The Daily Alaska empire., 1947-03-28

for 1946 was less than the income tax paid in 1945 The federal income tax for 1945 was $55,991.15. The reduction in the tax may be accounted for because of the re- peal of the excess profits tax, cap ital stock tax, declared value eX- cess profits tax, and slight re- duction in the tax rate. Taxable Income would, of course, vary from year to year and so affect tine amount of the tax.
 The operating cost for 1946 against the above gross income of $329,51723 from sale of current, rent and pole contracts was $266, 067l9, leaving a net revenue of S63,45O.04 from the sale of current, rent and pole contracts. The re- mainder Of the net revenue shown for 1946 was from merchandise sales and revenue income from bonds.
 The proposed purchase price of the AEL&P Company utility is fix ed at S900,00000. This purchase price is to be raised by a bond issue, payable solely out of AEL&P Company revenue. If issued the bonds will be paid and retired over a period of years, out of revenue from the AEL&P Company utility. The bonds will bear interest at a rate believed to be not less than 2l2 percent, but more probably not less than 3 percent. To retire the S900, 100000 bonds in 20 years would require an annual payment cut Of revenue of 1-20th of S900,- o0000, which is 45,000O0 annually The interest for the first year on s900,00000 at 2l2 percent would re- quire an additional S22 ,500.00 out of revenue The interest would be reduced annually in proportion to the amount of bonds retired If S45 ,00000 was retired the first year, the second years interest would be on $855, ,0000o, which, at 2l2 percent would be S21, ,375OO. Payments of would thus annually de- crease during the 20 years in pro- portion to the remainder of the S9Cc c,00000 principal owing. Pay rents on the $9OO,OoOOO principal would not decrease, but would re- main fixed at S45, 100000 annually until the S90O,OOO.OO principal was paid and retired.
 In addition to these fixed sums payable annually out of revenue, The City of Juneau would lose an 2stimated $l0,00000 in City taxes the mount of taxes proposed to be raised from the AEL&P Company oy the 1946 Council at the rate hearings. If the AEL&P Company utility is purchased, a sum equal 70 such taxes should be set up against the utility as an operating cost and paid into the City of Ju- leau general fund. Otherwise the City of Juneau would be out of pocket that sum annually.
 It is apparent. therefore, that he annual bond retirement (20 gears) of s45,0o000. plus interest the first year S22,500.00, plus approxi- nately S10,00000 for loss of taxes 0 the City of Juneau, amount to S77.50000. The net revenue report d by the AEL&P Company for I946 from sale of electric cur 'ent, rent received and pole con- tracts was S63 ,450G4 The re- nainder of the S75,229.42 shown IS Net Revenue was net revenue rom bonds and from the mer- department
 On the other side of the picture, he city of Juneau operating such public utility would not be required 0 pay the federal internal rev. enue taxes paid by the AEL&P which, as hereinbefore hown, was $38,o68.74 (for 1946) on Income from sale of electric cur ent, rent and pole contracts, which would be the only source if income to the City unless it con- inued the AEL&p Company mer- ,antile business.
 As hereinhefore shown, the re- nainder of the S44,61461 tax paid or 1946, names, S5,725.87, was tax ,n income derived from bonds and ales of merchandise. Whether the City would want to continue the business in competi- ion with tax paying residents ending the same line of merchan- ise is, at least at this time, un- The City certainly would lot have the AEL&P income from Income producing bonds owned by lie AE,L&P Company.
 Other federal and territorial tax $ and licenses now paid by the lEL&P Company (figures are for 946) are:
 Annual corporation license
 Federal tax on telegraph an
 Tarrit toria1 IInemnlovrua,of C