TAX PROBLEMS OF THE RAILROADS
THE railroads of the United States in 1931 paid the federal, state and local governments $303,260,000 in taxes, a sum equivalent to 9.3% of their operating expenses. Approximately 96.4% of the railroads' taxes for 1931 was paid state and local governments.
The railroads have long been a favored source of income for state and local tax boards. During the 'eighties and 'nineties railroad taxes in the Middle West kept many county governments and school districts operating. Railroad tax money was frequently the only real cash received during some years. This method of securing funds, although easy for the struggling communities, has proved more and more burdensome to the railroads. They are still expected to furnish large sums for local operating expenses and improvements. The public fails to realize that the railroads have no magic formula for producing additional income. It demands service at the lowest possible rates and at the same time a disproportionate part of the railroads' income in taxes. The advantages secured by the public through too heavy railroad taxation will eventually prove injurious