The important function of securing justice between the public and the corporation, which belonged to the early taxes upon public utilities, no longer remains. The public service commissions are expected to secure justice between the utility and the public as to rates and services, which deprives the tax of its regulatory aspects and leaves it only as a fiscal measure. To continue a tax for the purpose of regulation reflects on the ability of these commissions to accomplish their purpose. If their purpose is accomplished, however, no excess values appear to be taken by special taxes.

Under regulation, then, the question of taxation resolves itself into this: Are the corporations to be regarded as existing for the benefit of the users, for the community viewed as a body of taxpayers, or for both? If regarded as existing for the former, then the rates will be low and there will be nothing left, above a fair return, for taxes; if for the community of taxpayers, then high rates will be charged for service, with some curtailment of use; if for both, moderate rates will exist with a moderate surplus for taxes.

When a corporation pays a tax under a system of regulation, it merely acts as a collector of that tax from the user of the product. The net earnings must be large enough to allow a fair return. In ascertaining net earnings, taxes are one of the items to be deducted from gross receipts. If taxes were abolished, the total income of a company could be reduced by the amount of the taxes and the net earnings would remain the same.

Since taxes increase the burden to the consumer, some have advocated the abolition of taxes on public service corporations, while others would make the taxes comparatively light. Such taxes are, of course, class taxes-taxes upon the particular class of individuals using the product. This abolition would but mean a larger tax to be paid by the owners of other property. When considering all classes of property, it would seem no more than fair to tax the property of these regulated corporations to the same extent that other property is taxed, and in such a way as to equalize the burden on the different classes of property.