A PRIVILEGED CLASS--THE MONOPOLISTS RELIEVED OF THE BURDENS OF
TAXATION--AN OUTRAGE UPON REPUBLICAN GOVERNMENT.
Another evil resulting from the railroad system of the country is the
partiality shown railroad companies in the matter of taxation. The
constitutions of all the states provide that the levy of taxes shall be
uniform; and in contemplation of law each owner of property subject to
taxation must bear a proportionate share of the taxes levied for the
support of the government. Indeed, it is a part of the compact entered
into among all civilized people, that each will contribute a
proportionate share towards defraying the expenses of the government
under which he lives, and which affords him protection, and secures to
him the enjoyment of his rights as a citizen. In a republic where all
have, or are supposed to have, equal rights, this contribution to the
support of the government is a duty weighing upon all, and to make a
discrimination in favor of any man or class of men, or of any companies
or corporations, contradicts the fundamental principles of republican
government, and recognizes favored or privileged classes. To compel the
property of individuals to alone bear the burdens which should be shared
by that of corporations violates both the letter and spirit of the
constitution. All public burdens should bear equally upon all people,
associations, and corporations. The legislature has as much right to say
that the property of one-half of the citizens of a state shall pay the
entire expenses of the government, while no taxes shall be imposed upon
the property of the other half; or to provide that they who engage in
particular branches of business shall supply all the means for defraying
the expenses of the government, as to provide for the partial or total
exemption from taxation of the property of corporations. Yet as a
matter-of-fact railroad corporations are not required to pay their
proportionate share of taxes, nor is their property subjected to the
same rules of taxation as that of individuals. In almost all the states
these corporations are taxed upon their earnings; their own officers
keep the books, and once in each year make a showing, and upon this
showing a small tax is levied. If they are honest and present a correct
statement of the earnings of their road, the amount of tax fixed by the
legislature of the state is paid; but if they choose to suppress the
truth a less amount must suffice. Take the state of Iowa as an
illustration. Prior to 1872 railroad property in this state did not pay
more than one-seventh as much tax upon its value as the property of
individuals, and under the present law it does not pay more than
one-half as much. Yet no property in the state has yielded such large
profits on its actual cost and value as railroad property. Iowa had in
1872, subject to taxation, 3,160 miles of railroad. Take the value of
their roads as fixed by the companies and reported in the Railroad
Manual, and the average per mile is over, rather than under, $40,000.
Then for the purpose of taxation reduce the valuation to about the same
rates as are fixed upon the property of individuals, and the average
would be about $18,000 per mile. This would make the grand aggregate for
tax purposes $56,000,000. Now if a two per cent tax (which is less than
the average rate for all purposes) was assessed upon this property, the
revenue to the state and counties would amount to the sum of $1,120,000.
But if the same rule of taxation were applied alike to all property in
the state the rate demanded of individuals would be less than at
present, while railroad companies would only be required to do what the
constitution exacts of them, to-wit: pay their just proportion of taxes
for the support of state government. Is it any wonder that we complain
of high rates of taxes when so large a portion of the property in the
state is exempt from taxation? In Muscatine county there is at present
about eighty-five miles of railroad. At an assessed value of $18,000 per
mile the total for taxation would be $1,530,000, which, on a two per
cent tax would afford a revenue of $30,600, of which, if divided between
the state and county as other taxes are divided, there would be paid
into the county treasury about $24,500, which would be a large increase
over the amount now paid to the county. The same would be the result in
all the other counties in the state were the manner of taxing railroads
so changed as to make no discriminations in their favor. The same kind
of discrimination is made in most of the states in favor of the
railroads and against the people. No good reason has ever been given for
this kind of discrimination, nor can it be supported or justified upon
principle or upon constitutional grounds. The value of a mile of
railroad can be as easily ascertained as that of an acre of ground, or
of a house and lot. The depot, and station grounds and buildings can be
assessed as readily as any grounds or buildings. The value of their
rolling stock is always included by the companies in giving the cost of
their roads, and the value of the roads, including rolling stock, can be
more easily ascertained by the assessor than the value of many kinds of
personal property, yet it has never been considered necessary or
permissible under the constitution to discriminate in favor of
individuals or classes of individuals when assessing property for the
purposes of taxation. But when the property of these gigantic
corporations is to be taxed, when they are called upon for their share
of taxes to aid in defraying the expenses of the governments that are
granting them extraordinary and exclusive privileges, they refuse to
submit to the law which prescribes the manner of collecting taxes from
the people and ask special legislative enactments in their favor. To
secure such enactments they use their great influence in filling the
legislative halls with their stockholders, directors, and attorneys.
Thus far they have generally succeeded, and in most of the states
special statutes, discriminating in their favor, are now in force.
Because of this special legislation the people are paying taxes that
should be paid by railroad companies, and in return for favors shown,
these companies are constantly increasing their extortions, and imposing
additional burdens upon the people.
We can more fully realize the extent of the unjust burdens imposed upon
the people by ascertaining the amount of capital invested in railroads
in the United States, and showing its relative value compared with the
taxable property of the country. For this purpose it will not be unfair
to take the value of railroad property as given by the different
companies and published in the Railroad Manual. The reported cost of all
but forty-six roads in the United States is $2,070,980,285. If we add to
this amount the probable cost of those not reported, among which is the
Union Pacific, this large sum will be swollen to nearly $3,000,000,000.
The taxable property in the United States, reported in the census of
1870, was $14,178,986,732. If this railroad property was included, these
corporations should pay about one-fifth of all the taxes collected in
the country. The method of taxing railroad property that has always
obtained in Iowa, and some of the other states, relieves it of at least
three-fourths of the taxes justly due from it, and requires the people
to supply the deficiency created by this exemption. But, as will appear
from the census returns, a small portion only of the vast railroad
wealth of the country is included in the valuation of property returned;
nor is it listed and returned by local assessors as is the case with the
property of individuals. In Iowa the census returns show the value of
the property in the state to be $302,515,418. The value of railroads in
Iowa, as shown by the different companies, is $84,067,663. An equal
assessment and levy of taxes upon all the property in the state subject
to taxation would require this railroad property to pay over one-fourth
of all the taxes levied in the state; yet as a matter of fact not
one-twentieth of this amount has ever been collected, unless we except
the year 1872, when a small increase over old rates was required. While
all acknowledge the injustice of this system of discrimination in favor
of railroad companies, and while the people are burdened with more than
their just proportion of taxes, all efforts to correct the evil seem to
have proved abortive. The fact that more than eighty-four millions of
dollars, being over one-fourth of the entire wealth of the state, is
held and controlled by corporations, possessing under their charters
special privileges, who have combined to prevent legislation that would
require of them a contribution of their just share for the support of
the government, explains the reasons for these discriminations in the
collection of taxes. The power of this railroad oligarchy is now so
great that it shapes and controls all revenue statutes. In all cases
where the interests of the people and those of these corporations
conflict, the corporations acting in concert, are triumphant, and the
interests of the people are disregarded. Taxes justly due from the
corporations, by special legislation, are extorted from the people,
because this anti-republican combination, controlling the wealth of the
country, demands it.