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18 THE ATLANTJAN :: .* 99 HERE’S TO LABOR May you live long and pros per. Your cause is right We Handle the BOSTONIAN SHOE STRICTLY UNION MADE We will appreciate a portion of your liberal patronage Bell Phone Main 271 Home of Good Shoes Successors to Knott & Awtry Shoe Co. TAXING THE CORPORA TIONS. Systems Now in Use in Eastern States—Wisconsin Gets 71 Per Cent, of Total Revenue—Rail road Valuation is Made Year ly—Very Small Call is Made on General Property. Commissioner of Corporations Herbert Knox Smith, submitting his report on the taxation of corporations in the Eastern States, in which are classed Ohio, Indiana, Illinois, Michigan, and Wisconsin, says that this group differs from the Mid dle Atlantic group in using much more extensively the general property tax for State revenue. Wisconsin alone approaches a separation of sources of revenue for ordinary State expenses. Ohio applies special taxes and the general property tax to the same cor porations for State purposes. Indiana and Illinois levy practically no special taxes on corporations. Michigan and Wisconsin make elaborate physical valuation of steam and street rail way property, which, with earning ca pacity, forms the basis of State-ad ministered ad valorem taxes. Revers ing the tendency Almost universal elsewhere, these two States have, with respect to the taxation of rail roads, gone from the modern gross earnings method to the ad valorem tax. They also use extensively the “average rate” method, i. e., applying to certain public-service corporations a rate which is the average of the State and various local rates. All of this group exempt shares of stock in ■the hands of holders, when the cor porate property is taxed. Wisconsin derives about 71 per cent, of its total State taxes from corpora tions; Ohio, 52 per cent.; Indiana, 19 per cent.; Illinois, 34 per cent. In Michigan, revenue from special cor poration taxes is applied entirely to the school fund, and equals about 45 per cent: of the total taxes collected by the State. The entire real and personal property of Wisconsin is an nually valued for State purposes by a State commission. The constitu tions of three States in this group, namely, Ohio, Indiana, and Illinois, prohibit the exemption of corporate property from the general property tax. Railroad and insurance compan ies are among the heaviest taxpayers in this group. In Ohio the total State revenue from taxation in 1909 was a little more than $10,000,000. Of this amount, over 5? per cent, was from corporations. State and local taxation of corpora tions is by the ad valorem method, supplemented by special methods of Slate taxation. Thus, in addition to the State tax on property, railroads pay on gross earnings; express, tele graph, and telephone companies on gross rceipts; and mercantile, manu facturing, and miscellaneous corpora- j tions on capital stock. While the rate of the capital stock tax is compara tively low, • it yields about $1,200,000 annually. It is levied on the par value of issued capital stock of do mestic corporations and on that por tion of authorized capital stock of foreign corporations which is repre sented by property within the State. The new law of 1910 provides for the most highly centralized administra tion found in any of the States thus far studied. The State Tax Commis sion has wide administrative powers. It assesses the property of practically all public-service coporations and ap portions its value among counties and local districts. It fixes the amount upon which the State collects taxes on corporate earnings and capital stock and has supervisory and ad ministrative authority over local of ficials, with additional power to change local assessments upon its own initiative. The largest items of revenue from taxation in 1909 were from general property tax, other than corporations, $2,687,000; liquor tax, $2,000,000; gross earnings on steam railroads, $1,300,000; capital stock tax, $1,200,000, and insurance compan ies, $1,100,000. The acount received from inheritances is comparatively small, $45,000. The total Indiana revenue from tax ation in 1910 was a little more than $7,500,000. Of this amount, approxi mately 19 per cent, was from corpo rations assessed by the State. Taxes paid by important classes of corpo rations assessed by country boards can not be estimated. State and local taxation of corporations is almost wholly by the general property tax, or ad valorem method. Special cor porate taxation is applicable to cer tain financial, insurance, navigation and car companies only. Administra tion is centralized to the extent that the more important classes of public- service corporations (such as railroad, express, telegraph companies, etc.) whose property usually derives addi tional value from State-wide and in terstate operations, are assessed by a central State board. Other corpo rations are assessed by county boards. Shares of stock in domestic corpora tions (except banks) are not taxable when the property of the corporation is taxed. Shares in foreign corpora tions are taxable to the holder. The largest single item of revenue from State taxes in 1910 was from steam railroads, something more than $650,- 000; the next was from insurance com panies, $474,000, and the third from incorporation fees, $111,000. In Illinois, the total State tax re- • ceipts in 1910 were about $8,000,000. Of this amount corporations paid ap proximately 34 per cent., general prop erty in the State 58 per cent., and inheritances 6 per cent. The Illinois system applies special taxation to no corporations except to the Illinois Central Railroad and to certain kinds of insurance companies. All other corporations pay the general property tax locally for State and local pur poses. Property is assessed at one- SAM H. SMITH. President Guarantee Trust & Banking Co. A Staunch Friend of Organized Labor. *