Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1910-01-11


made public. will not fall upon any large
percentage of the American people in
direct way, although the corporations
may be able indirectly to shift the bur-
den to all the people. Statistics show
that 1 per cent of the American people
own 54S per cent OF the property of the
nation, and that 1919 of the remaining 80
per cent own 1922 per cent of the remain
ing property From this it will be seen
that fewer than one-ninth OF the people
own seven-eighths of the wealth of the
United States. The other IS per cent of
them must be satisfied with the beggarly
crumb of one-ighth divided among them
all. Few none of them can own stock.
AT the time the statistics were gathered
the average wealth of the families who
constitute only one one-hundredth part
of the population was slightly more than
$3.50, 600. 600; that of the families who con-
stitute one-ninth of the population was
slightly less than $4,000 per fam
lily. More than half of the whole ma
ton led the hand-to-mouth existence of
poverty.
1t probably is safe to assume. therefore,
that only one person out of ten will feel
the tax directly. But just as Alexander
Hamilton once stated that the tariff
duty would ever be reckoned in making
up the cost to the ultimate consumer, so
will the corporation tax be reckoned as
one of the expenses of business and add
ed to the cost of production. 1t has
been one of the most serious questions of
the history of taxation to prevent the
shifting of the burden from the shoulders
of those upon whom 1t is levied to the
back of those for whom it was not in
tended. No one has yet devised guar
anteedb to- work or -money~resunded plan
for preventing this shifting of the
burden.
1t is estimated that the corporation tax
will yield about $4,000, 900 a year when
the law is in full operation. AS there are
100000 corporations to which 1t will APP
ply, the average tax per corporation will
be about SIS Yet no one can know even
approximately what it will yield. An In
stance OF how wide of the mark the gov
eminent estimators may come is the
prediction of former United States Treas
urer Roberts. made I'm 1907. He said then
that the revenues of the government
were amounting to fully 10 per cent more
than the expenditures, and that IL the
Dtngley law remained in force there
would be a surplus OF $40 000, 900 for the
year. He recommended, therefore, that
the revenue laws be revised downward
to the extent of allowing sl2o, 200, 900 to re-
main in the pockets of the people,
which might otherwise be taken from
them through the taxing powers of the
government But then came the panic
of October. 1907 and instead of surplus
$40 10000 from the years operations.
there was deficit of seo,ooo.OOo. Thus
had trained financier missed his guess
by the immense sum of $50, 100000.
strenuous efforts are to be made 70
have the corporation tax declared nm
constitutional. Test cases will be
brought to the attention of the courts
just as soon as possible. and one of
these will be carried to the supreme
court and an expeditions decision asked
there. In the senate it was freely de-
clared by many that the measure is un-
constitutional, fully as much so rs an
income tax according to the 1893 decis-
ion. II will be attacked on that ground
1t will be attacked also on the ground
that the system of bookkeeping ii will
involve is an impossible one, and that
the publicity features are so contradic-
tory that the purpose of congress in
connection Herewith cannot Be accom-
plished.
All sorts of corporations are going to
fight the measure tooth and nail, and are
confidently expecting that It Will be ror,-
ed to go the way OF the income tax law
OF the Wilson-Gorman tariff. On the
other hand there are many who believe
that the supreme court will sustain IT,
and still others are inclined to hope that
there will be at least an obiter dictum
opinion expressed on the income tax
question. They think thar the court can
not very we'll decide the question of the
constitutionality Of the corporation tax
without giving some clue to its present
views on the income tax.
1t is said that there will be many
ways to get around the corporation tax
In fact the corporations which wish to
dodge 1t do not need to go so far as to
employ a lawyer TO devise these ways.
The senate debates on the tax will
form a sort of textbook for the dodger
In their effort to show the impractical
bility of the measure the senate law
yers in opposition to it pointed out its
weak spots, and these revelations are
now in the Congressional Record, where
they may be read and seen OF all men.
One of the ways or lodging the tax
will be for a corporation to resolve itself
into a limited partnership. No matter
then how wealthy it is or how great
it's income, 1t cannot be touched. 1t will
be exempt. Another way to get around
the tax levy is to make every stock
holder, IL there are bur a few OF these
a salaried director These salaries can
be in lieu of net income, and the gov
eminent carnnot go behind the returns
! Another way is to increase the amount
OF paid-up stock so that the indebtedness
may be increased; the law providing
that interest paid out during the year
on bonded and other indebtedness not
exceeding the amount OF paid-up capital
may be deducted as an expense of OPP
GRAFTON.
The big holding companies which have
been regarded by many the most OBJ
| jectionable of latter-day corporations, are
exempted completely from the corporation
| tax. In its anxiety to prevent any share
of stock being forced to bear a double
burden congress provided that all income
received from stocks in other corpora
tons subject to the tax shall be exempt
Fray., faxafion