The decade 1880 to 1890 was not marked by important tax legislation until near its close. But about the middle of the period an agitation for heavier taxes upon corporations sprang up. In 1885, in his biennial message to the legislature, Governor Pattison asserted that real estate was paying too great a proportion of the total cost of supporting state, county and local governments. *23 The inequity arose out of the almost complete exemption of corporate wealth from local taxation. Corporations paid the greater part of the state taxes, but local taxation upon real estate, especially farm real estate, was, the governor believed, four times as burdensome as the state taxes upon corporations. *24 The governor recommended that the personal property tax and certain license taxes levied by the state be turned back to the localities and that the state raise all its revenues from the corporation taxes. *25 In 1887 Governor Pattison reiterated the recommendations made in his message two years earlier. *26 In the message of 1887 the governor referred to the insistent agitation of the agricultural interest for a more equitable adjustment of taxation and advised that heavier taxes be imposed upon corporations and that real estate be further relieved of the burden of supporting local government. *27

The result of the demand for readjustment of tax burdens was the series of laws passed during the years 1889 to 1893, which increased the taxes paid to the state by corporations and by personal property. These laws also provided for the return of a part of the revenue from the personal property tax to the localities in which it originated and for the transfer of the proceeds of certain retail liquor licenses to the local authorities. *28 The effect of these laws was greatly to increase the yield of the corporation taxes as is shown by the table on page 146.

23 Pennsylvania Archives, IV Ser. X, pp. 233 ff.

24 Idem, p. 234.

25 Idem, p. 235.

26 Idem, pp. 488-490.

27 Idem, p. 490.

28 See Sec. 16, Act 1 June, 1889, P. L. p. 426; Act. 9 June, 1S91, P. L. pp. 248-249; Act 8 June, 1891, P. L. pp. 229-243; Aud. Gen. Report (1891), p iii.

Receipts At The Pennsylvania State Treasury From Corporation Taxes, 1880-18891

(in thousands of dollars)

Tax

1880

1881

1882

1883

1884

1885

1886

1887

1888

1,814.8

38.4

88.0

583.6

1889

Capital Stock......................................

1,351.9

35.2

51.4

653.8

811.1

460.0

34.7

196.7 339.6

36.9

1,692.9

49.0

64.1

787.03

257.6

460.0

54.1

207.3 335.2

242.3

1,675.4 686.82

74.3 658.73

90.7 460.0

131.0

234.9 350.2

32.1

1,534.1

10.9

59.1

837.63

7.1

460.0

107.0

255.7 365.5

39.6

1,535.7

2,037.6

1,729.0

1.9

68.7

1,210.6

1,702.1

33.6

81.6

776.4

1,952.8

Corporate Loans................................

103.5

Net Earnings or Income....................

71.6

787.9

.8

460.0

84.9

285.1 373.1

36.5 6.4

63.8 913.3

71.7

Gross Receipts....................................

517.3

Coal Companies..................................

 

Commutation of Tonnage Tax Premiums on Charters of Corporations..............................................

460.0

80.2

307.2 363.3

39.2 1.5

460.0

119.1

334.9 415.9

41.2

460.0

148.6

377.6 431.6

42.6 1.0

460.0

164.4

428.8 456.1

42.9

460.0 164.6

Tax on Premiums and Licenses of

Foreign Insurance Agencies......

Bank Stock..........................................

474.3 469.9

Tax on Gross Premiums of Domes-Cos................................................

49.9

Log and Boom Cos...........................

 
               

Total....................................

3,971.3

4,149.5

4,394.1

3,676.6

3,642.0

4,266.1

4,381.3

4,055.1

4,077.0

4,264.0

1 For fiscal years ending November 30. 2 Contains tax on municipal loans, etc. 3 Contains a small amount of tax on receipts of notaries. From Reports of Auditors General for years given.

Receipts At The Pennsylvania State Treasury From Corporation Taxes, 1890-18951

(in thousands of dollars)

Tax

1890

1891

1892

1893

1894

1895

Capital Stock..................................

1,935.4 541.5 100.4 513.8 865.7

168.7 354.0 413.4

45.6

2,378.9

1,289.2

68.4

696.2

2,211.1

682.7

70.9

563.2

3,544.9

769.2

79.7

542.1

3,635.6

1,188.9

78.1

775.8

3,537.8

Corporate Loans..............................

822.4

Net Earnings or Income................

83.1

Gross Receipts................................

598.5

Commutation of Tonnage Tax......

 

Premiums on Charters of Corporations......................................

243.8 395.3 413.2

55.0

242.0 421.8 535.7

46.9

244.1 463.3 530.2

60.4

215.2 495.8 511.1

55.8

241.8

Foreign Insurance Companies Bank Stock......................................

513.6 514.1

Gross Premiums of Domestic Insurance Companies......................

51.0

   

Total..................................

4,938.5

5,540.0

4,774.3

6,233.9

6,956.3

6,362.3

   

1 Reports of Auditors General for years indicated. Fiscal years ending November 30.

The state system of taxation has undergone no important modification in recent years. *29 By far the greater part of the revenue receipts is derived from the taxation of corporations. Thus in 1914, out of a total of $31,114,94930 received at the state treasury, $21,371,287 was derived from taxes, fees, and penalties paid by private corporations and associations. Of this amount, $11,765,135 was derived from the tax on the capital stock of corporations exclusive of those engaged in banking and building and loan associations. License taxes on thirteen categories of business enterprises yielded a total of $3,390,724 and the collateral inheritance tax produced $2,516,790. The remainder of the total income of the state, or about $4,000,000, was derived from a great number of sources. Thus corporations paid taxes, fees and penalties amounting to about two-thirds of the total income of the state.

29 Exception should, of course, be made for the state tax on personal property. The Act of 17 June, 1913, provided for the relinquishment of the tax on certain kinds of property to the localities. See infra, p. 149.

30 This figure represents the total receipts given by the Auditor General less $326,101 made up of refunds and the amount paid into the state treasury by boroughs, townships, and counties for their share in constructing permanent highways. Aud. Gen. Report (1914), pp. 7-9.