A few States levy an income tax, in some eases instead of the general property tax, in others in connection with it. The income tax law of Massachusetts has survived from colonial days. It exempts incomes under $2000, taxing only the excess, and exempts also the income from property already taxed. It is laxly admin istered: There are also income taxes, or, as they are sometimes known, occupation taxes, in Louisi ana, Pennsylvania, Virginia, North Carolina, and South Carolina.
The assessment of the property of corpora tions by local bodies under the general property tax has everywhere been found to be inadequate, and the expedient has commonly been resorted to of assessing the property of such corporations by a State hoard instead of by local assessors. Corporations are taxed, however, on another basis than that of the value of their property. According to Professor Seligman, the basis of taxing corporations in the United States has been: (1) the value of the property; (2) the cost of the property; (3) the capital stook at par value; (4) the capital stock at market value; (5) the capital stock plus the bonded debt at market value; (6) the capital stock plus total debt, both funded and floating; (7) the business transacted; (8) gross earnings; (9) dividends; (10) capital stock according to divi dends; (11) net earnings; (12) value of fran chise. Several States have accepted gross revenue
or net earnings as a basis for taxation, and in several States, Wisconsin, Michigan, etc.. this tax is progressive. A feature of recent taxation is the so-called special franchise tax. A tax of this sort, which falls upon "franchises for the use of streets granted by municipalities to pub lic-service corporations," was passed by the New York Legislature in 1899, and a somewhat simi lar tax was levied in New Jersey in 1900. One of the most serious drawbacks to the just and equitable taxation of corporations lies in the in terstate location of their property and the in terstate character of their business and the con sequent frequent conflicts of jurisdiction. To prevent this Prof. Henry C. Adams advocates the Federal taxation of interstate commerce, while another authority on finance (Professor Seligman) urges uniformity of State action or, in default thereof, taxation by the Federal Gov ernment and subsequent redistribution of such revenue among the States.