The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1913-07-17
DOUBLE THAT OF INDIVIDUALS
Legislators Declare That Income Tax is
in the Statutes to Stay and Seek to
Make it Less Obnoxious to the Larger
Taxpayers of the State,

lature so that it can be said the prin-
cipal change in the income tax law
which this legislature will make will
be an increase in the corporation tax
The bill will 60 through the legisla-
ture in practically the form that it
has passed the senate. Outside of the
change in the tax on corporations the
changes in the law are for the most
part administrative and amount to but
little. In fact they are but declaratory
of the administration policies under
which the tax commission has been adj
the law.
The change in the corporation tax
is, however, important. Instead of
making the tax on the earnings proper
tionate to the assessed valuation of the
corporations, the law provides fiat
rate for corporations which is just
double that charged individuals until
the earnings of a corporation get up
into the class where they bear a six
per cent rate at which time the rate
becomes stationary. Not much opposi-
tion has been raised before the legis-
lature to change in the corporation
tax for the reason that it affects cor
porations but little, the larger corpor-
ations all being included in the class
which pays the six per cent rate, and
in this way their tax being about the
same as it was under the old law.
The only corporations which are
very materially affected are corpora
tions which with very small capital
investment earn a large percentage on
that capital investment. Take, for
instance, corporation which earns
$500 whose property is only assessed
as being worth $1,000 Such cor
poration paid under the old law an
income tax of $50 whereby under the
new law it will pay an income rate of
but $40. A large corporation which
has $l,000,000 invested capital and say
earns but $4,000 on this invested
capital would pay an increased tax
under the law as it has been changed.
As matter of fact, however, such a
corporation is only theoretically af
fected.
The personal property of a corpora
ton having $1,000,000 capital and hav-
ing but small earnings would be so
large in all probability that the per-
sonal property tax which would be
assessed against the corporation would
be more than an offset to any income
tax which might be assessed against
it and in this way they would have
no income tax to pay anyway, and
therefore the law makes no particular
change in their taxation. Many peo-
pie who have given the income tax
question considerable study believe
that a mistake has been made in
changing the form of the corporation
tax. 1t is their belief that as the
theory of the income tax is based on
earning power a small corporation
with very little money invested
should pay large income tax, as they
claim that that is the only way in
which such corporation can be
reached for taxation purposes.
Undoubtedly it is the fact that when
it comes right down to brass tacks tho
change in the method of assessing the
income tax against corporations makes
very little difference in dollars and
cents to any one that has caused the
lack of interest on the part of corpora
tions to the revamped form of the law,
If the proposed changes had affected
the taxation of corporations to any
material amount there would have been
a fight on the bill which would have
echoed through the walls Of the CAPT
toll. The fact no changes were made,
however, shows how little opposition
there is to an income tax law and how
now the tax has been developed to
sliding scale basis it is not considered
any very great hardship by the public.
At the beginning of the session there
were rumors abroad that an attempt
might be made to secure a repeal of
the income tax altogether. Such an at
tempt, however, never materialized and
corporation representatives who have
been here have, in fact, not paid any
great amount of attention to the bill,
more than to look it over and figure
out how the corporation they repre-
scented would sbe affected. And upon
finding that they were affected but
scarcely at all and not materially in
creased in their taxes by the changes
in the law have not even appeared
against the bill. In fact, most of the
corporations have been inclined to
think that the bill made the corpora
ton tax If anything less drastic than