The Bridgeport evening farmer., 1913-05-07
HOW THE INSURANCE. INTERESTS OPPOSE
 INCOME TAX BILL
Flooding Congressmen With Letters Forwarded by Their
 Policy Holders
Ry our staR -correspondent.)

I
 Washington, May 3.-That an unfair attitude is being taken by a number of the large insurance companies in an attempt to use unsophisticated policy holders to pull their chestnuts
 out of the fire, is the claim of the members of congress who are being showered with circular letters Issued by the companies for their policy holders to sign The companies have several thousand life insurance policy holders believing that they are going to be obliged to pay the income tax.
 CordeIl Hull of Tennessee the ex- pert who drafted the income tax sec- tion of the bill has been asked about the income tax section Of the tariff bill and its application to life insur- ance. In reply he says in part: .'The pending bill merely proposes to re-en- act the present provision of the Cor poration tax law as construed by the government heretofore, under which $1 per annun Is levied upon the net profits of insurance companies.
 Even if the corporations could and should pass the entire amount of tax to it's policy holders 1t would only amount to between 15 and 20 cents for each policy holder in the country. .tBut the pending income tax bill does not in any sense propose to place this tax upon the proceeds of life insurance policies paid upon the death of the Insured, nor upon the return Of prin- cipal or any part of the principal in vested in life insurance in any man ner (endowment poltcies) during the life of the person making the invest ment for business purposes.
 The proposed tax would however apply to any actual gains or prodts Cwhere incomes were over $4,0OO a year) arising from such fnvestment and return either separately or along with any partion of the principal from time to time, just as interest upon the loan of money which might be paid to the lender separately or which might be included with the part payment of the principal. An actuary would de- termine whether any actual gains &C., crue with respect to these insurance transactions If none accrues there fore the tax would not apply in any sense.
 fes. which have arnassed in the neigh borhoOd of 8 half million of dollars assets which derive large profits an nual1y from savings in expenses, from savings in mortality, and from ex- cess interest earnings, in addition to the amount received from premium payments made by policy holders, are seeking to have these net profits in bulk exempted from the proposed nom ina1 tax of 1 per cent per annurn. Of course we all feel kindly toward in surance companies and especially to- ward all policy holders, and would un- der no circumstances do them an in justice, and by my investigation can find no theory eyen under all of the facts by which the policy holders would be in the least affected. Most of these companies have always rep resented to the public and to the pol icy holders that they declare periodi- cal dividends out of the surplus, etc. 1 and were not simply making a return of premium savings or5preimum over charge. It has always been pictured to the public that these companies l were making large profits each year from the source have mentioned 1 above, out Of which policy holders re- 1 cefved annual dividends; however, 1 when the government proposes a l 1 per cent. tax, not on the po1tcy-hold- l CTS but on the aggregate profits of the 1 corporation, the dividends then aban- | don their representations to the pub 1 lie and set up the contention that l they were simply making returns of 1 These com mpanfes have sent out cfrcu- | lars which consider misleading and, | whatever the intention, the effect of | which is to unnecessarily alarm and | excite the apprehension of the policy | holders.
 Barring the small dividends made to the policy holders, periodtcally these point to their several hun dred millions of dollars assets which are continually increasing, and say they belong to the policyholders. but