Rensselaer Republican, Volume 23, Number 36, Rensselaer, Jasper County, 7 May 1891 — AN ODIOUS TAX LAW. [ARTICLE]

AN ODIOUS TAX LAW.

The tax law enacted by our last Legislature is creating great dissatisfaction the State, and justly so. The people knew before the Legislature met that the State finances were in a bad condition, that a debt of .nearly $9,000,000 had keen piled up, and that the revenues of the State were insufficient to meet its ordinary expenditures, not to speak of the necessity of providing, for a reduction of the debt. Under the circumstances it was plain that something would have to be done to increase the revenues. Those who were familial’ with the situation expected that; but they also expected that an effort would be made to discover new sources of revenue, and, as far as possible, shield the people, already heavily burdened with taxation. There wasl he more reason to expect this since the majority of the Legislature were particularly loud in their professions of reform, their promises of relief to the farmers and tax-payers generally, and their pretended opposition to corporations.

Governor Hovey was among those who hoped that an earnest and honest effort would be made to increase the State’s revenues without increasing the burdens of the people. In his message to the Legislature he made a very clear statement in regard to the State finances. He showed that there was an absolute necessity for an increase of revenue, but urged that it be done by increasing the taxes of corporations. He called attention to the fact that some of the States raised much the largest part of their revenue in that way, thus relieving the people in the same proportion. The following extract from his message shows the character of the information he laid before the Legislature:

• In New York, New Jersey, Connect! cut, Pennsylvania and Wisconsin, and other States, scarcely any part of the tax for State purposes is collected on lands. The farmer is left almost untouched, and the principal State reve nue is collected from corporations and railroads. In these States corporations and railroads alone will nearly average the full amount of our State revenue. New York collects from her corporations as follows: Class 1, insurance. $100,196 05 Class 2, railroads 661,657 27 Class 3, steamboats 47,947.11 Class 4, telegraph and telephone.. 41,488.25 Class 5, gas and mining 95,633.08 Class 6,miscellaneous . ............ 154 314 50 Class 7, banks 6U6&45 Total $1,172,589.73 While the State of New Jersey col led sTaxon railroad corporations $938,515.59 Tax on miscellaneous corporations 222,103 os Tax on certificates of incorporation 43,463.20 Tax on foreign insurance companies - - - 6,110 48 Total : $1,210,13230 And the State of Connecticut Collects. Tax on savings banks r.r.v. on? 44 Tax on non-resident stock.. .. *7B.<Bs<h Tax on mutual insurance companics a.w-1 Tax on agents of insurance com- ' ponies of other States . . 24.749.4« Tax on railroads.... 671.8W.S Total Contrasting Indiana with Connecticut, he showed that Connecticut, with 1,010 miles of railway, collected in taxes from that source 1671,820,

•while Indiana, with 6,961, collected only $83,715. In Wisconsin thg revenue from railroads nearly pays all the expenses of the State, and her niarifls are not taxed at all for State purposes. The Governor called attention to the fact that in New York, New Jersey and Connecticut the State levy was far below that of Indiana, owing to the fact that the other States raise so large a revenue from corporations. In Ohio the State tax rate in 1889 was 2 7-10 mills on the SIOO, the rest of her revenue being raised by taxes on corporations. In the same year Pennsylvania realized from her taxes on corporation stock and limited partnerships $1,952,771; on gross receipts of corporations, $517,276; on the stock of bank, safe deposits and trust companies, $469,900; on private corporations, $103,530. The State tax levy was 3 cents on the SIOO. Little New Hampshire realized $107,353 from her railroad tax. Michigan collected $846,294 from taxes upon railroad, insurance, telegraph, telephone and other companies. lowacollected in corporation taxes $1,348,585. Maine realized $99,002 from her tax on railroad companies and $24,825 from her tax on insurance companies. In Indiana the total amount realized from taxes on foreign coroprations' during the year ending Oet 31, 1890, was $100,261, and of this amount $98,632 was paid by insurance companies, all other corporations paying only $1,728. With all this information before it, or easily accessible, the Legislature might, with very little trouble, have prepared and passed a bill that would have produced all the increase of revenue required by the State without adding a penny to the taxes of the people. It could teven have made a material reducion in the State levy if it had passed a welldigested law for the taxation of corporations. Instead of this, or of making any effort to meet the well founded expectations of the people, what did the Legislature do? It passed a law increasing the State levy from 12 cents to 18 cents on the hundred dollars, requiring all property to be listed for taxation at its full, true cash value, and giving assessors inquisitorial powers of the most searching and arbitrary character. As if this were not enough, it reduced the tax on sleeping-car companies doing business in the State from 10 per cent, on gross receipts to 2 per cent, on gross receipts, a reduction of 80 per cent.; it reduced the tax on telephone companies from 1 per cent, on gross receipts to | of 1 per cent., a reduction of 75 per cent; it reduced the tax on telegraph and express companies from 2 per cent, on gross receipts to 1 per cent., a reduction, in each case, of 50 per cent We doubt if the entire history of legislation in any or all of the States would furnish a parallel to this action of the last Legislature. For utter imbecility in the handling of an important financial problem, for stubborn and stupid rejection of suggestions showing how it should be dealt with, for blind disregard of the example and the experience of other States, for complete betrayal of campaign professions and promises, and for open sacrifice of the interests of the people to those of corporations, the record has no equal. It is itself its only parallel. The party that made it should be buried under an avalanche of popular indignation, and its epitaph should be: “Here lies a party which wasted in petty schemes of partisan advantage the time that should have been given to public affairs; which devoted itself to stealing offices, while it should have been reducing their emoluments; which acquired power by promising to reduce the burdens of the'people, and prostituted it by increasing them; which added to the debt it was pledged to cut down; which refused to accept suggestions for increasing the taxes of corporations, and actually reduced them from 50 to 80 per cent., while adding nearly 100 per cent, to the taxes of the people.”— lndianapolis Journal.