CHAPTER XVI.
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.