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\ 7 The 1951 increase in depreciation expense over 1950 is due entirely to the added depreciable capital in service. As seen, the for depreciation under the investment basis. The increase on that basis is, in part, due to an adjustment in the depreciation rates. Taxes the amount of slightly over $20,000, based upon the assessed value of the property (See pages 28-29 of the November report). Though net ad­claimed. The balance of the local tax is the Municipal License Tax at the rate of 5/4 of 1% of the gross revenue. (Tables I-a to III, incl.) under present rates as there are no net earn­ings - in fact, operating expenses exceeded gross revenues in 1950, and are estimated to again result in a deficiency in earnings during 1951. Tinder the condition of any net earnings, Federal Income Taxes, of course, must be met. The effective rates are: estimated and “actual” 1950 are very close - except for the provision Taxes on the Water Utility are handled as before. A com­parison follows* 1950 1950 1951 Est'd Recorded Est*d State, County and City Federal other than Income Total $24,000 $22,687“ $22,840 The principal tax included above is the ad valorem tax, in ditions to plant are estimated at $230,000 for 1951, no added tax is Federal Excise and Miscellaneous Taxes are as shown. No Federal Income Taxes are included in Results of Operations 1950 1951 On the normal net income On the surtax tax net income over $25,000 22%