The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1910-02-24
1umlpnt 0Mattllman.
THE CORPORATION TAX LAW.

The corporation tax law, passed by
Congress at the last session, is not
meeting with any great degree of pop
ular favor. 1t was supported by not
a few Republicans with evident reluc-
lance because they felt that this form
of taxation should be left to the
States.
The enforcement of the act Is him
dered by the failure of Congress -
appropriate money for the indeXing
and drafting of the returns.
The New York Sun says:
mot less than ten cases to test the
constitutionality of the corporation iu
come tax are actaully before the Su-
Dreme Court of the United States, and
seven of these, including the strikingly
typical Vermont case of Stella p.
Flint against the Stone-Tracy Com
pany. are assigned for argument IN
the highest tribunal on March IA, less
than a fortnight after the last dav for
filing returns.
''In view of the chronology thus in
Dictated the grave nature of the que5-
ton to be determined in March by
the Supreme Court the weight of le-
gal opinion that has developed AGAINST
the law and the irreparable wrong
that will have been done if the re-
turns are made and the law set aside
it is manifestly the duty of Congress
to pass without delay an amendment
extending the time for filing for at
least sixty days. That will give an
opportunity for a decision of the pend
ing cases. 1t will involve no legisla-
tive reconsideration of the act of last
August. 1t will do no injury to the
United States Treasury. 1t will simp-
ly give the Supreme Court a chance
to saw before the damage is done to
individuls. whether the law is to stand
or fall; and this under the circum-
stances is just and right
1t is unfortunate that there could
not have been time before the date
when the law is TO so into effect to Sc
cure ruling by the highest court on
the constitutionality of the measure.
In another issue the Sun describes
the Vermont case, the first to be heard
before the Supreme Court, as fol-
lows:
"In the town of Windsor, Vermont
there are two general stores doing
business side by side. The people
from the country for miles around
drive in to Windsor and make their
purchases from one or the other of the
two establishments. This is not only
competition in its SIMPLEST form but
also of the most desirable kind.
THE pedigree of the rival stores is
the same The present concern was q
partnership known as TuXbury IL
Stone, dating from 1866. About FIFTEEN
years ago. in the ordinary develop
ment of the rural trade of which
Windsor is the market place, TuXbury
& Son dissolved, or rather resolved
itself into the two firms of Stone
Tracy e Co.. and Dwight TuXbury &
Sons. The former continued business
at the original stand, on the main
street of Windsor at the corner of the
lane leading to the railroad station.
The later built and occupied a new
store next door. In this juXtaposition
the two establishments have carried
on an active competition in the same
line of general retail mercantile bus
mess and have divided pretty nearly
equally the trade of Windsor and an
area of about twenty square miles OF
country tributary 10 the town. From
cranberres and eggs to Wheelbar-
rows and agricultural implements,
each watches the business of the 9th
er with acute interest and intelligence
and each strives constantly for every
legitimate advantage over its neigh
Dor and rival
This as we have said, is as it
should be. In all such competitions
may superior enterprise and honest
acumen always triumph! The differ
ence between the two concerns has
been merely one of formal organiza-
ton, a factor hitherto unimportant.
Dwight, TuXbury & Stone are an old
fashioned partnership. Stone, Tracy
q Co. incorporated ten years ago un-
der the laws of Vermont as the Stone
Tracy Company, with capital OF
500 600. Thus if the corporation in
come tax is unheld by the Supreme
Court, the Stone-Tracy Company will
pay a tax on its profits, while the
smaller concern next door will nay
no tax to the federal government. The
secrets of the business of the Stone
Tracy Company will become matters
of public record, open to inspection
by the alert competition next door,
unless the language of the sixth sec
ton Of the act means nothing. There
could be no better illustration of the
glaring destructive niquity of the
proposed tax.
1t is difficult to see why such appar-
ent inequality should be permitted.
1t ought to be possible to regulate
corporations without dealing unfairly
with them. If the corporation tax
law should be held valid there is
likely to be boom in partnerships.