Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-02-05
INCOME
TAX m CHICAGO
SECRETARY. M'AD0o WILL
ISSUE ORDERS SHORTLY
70. COLLECT ON THE BIG:
MELON"
SEARS, RoEAtk 8 COMPANY
Collection Of Tax on This Great
melon" Will Net Govern.
80 ment About 100000. >

NkHSYiYEtOu, ~ COs' .
.Adoo will issue orders shortly to the
| collector of internal revenue at thi-
I caso to take steps to insure the 0
lection of income tax on the $2O,0Oo,'
Vna melon" cut by Sears, Roebuck
& Company, last Saturday.
The treasury department has not
been advised yet whether the stock
holders Of Sears, Roebuck Il Com
pany will fight the tax.
II is prepared for opposition, how
ever, and, already has the law depart
ment Of the income division at work
on the case. go
Il is estimated that the collection
of tax on this melon" will net the
government. about 100000 over and
above the taxes collected from the
stockholders of the company last
year. b,
Rosenwalds Pays Most.
julius Rosenwald, head Of the great
mail order house, will pay the larg.
est tax, of all the, stockholders. From
the "melon cutting" Mr.. Rosenwald,
received 1880 shares of stock, which
at q par value of $1O0 would add the
sum Of $7,3S5,0CO TO his. income for
the year. As the value Of4the stock.
is about $40 per share, however, this
stock at. the time it. is distributed in
March probably will be worth in the
n~eighborhood of 10000, 900. {
On this amount Mr.. Rosenwaldtwill
be called to pay a tax of six per cent
which is just n per cent less than
the average Sears, Roebuck & Com.
pany annual dividend. on the common
stock. Thus; Mr.. R~osenwald's tax
on. his increased income for this year
will be IN the neighborhood of $780,.
900. The Chicago millionaire for one
year in his life undoubtedly will be
one of the three or four greatest tax
payers in the country. r
Reported az income.
An official of the treasury in dis
GUESSING the Chicago case, explained
the treasury's position. 49,.
Before the dividend, was passed."
he said, the surplus, or. the dividend
fund, was the property of the corpora
ton and not of the individuals who
own stock in that corporation as indi.
viduals. There was no way by which
the. individual could get his hands on
the money which vas probably with
held as capital.
However, when the stock was or
dered issued it provided a way for
the individual to realize at the mar.
ket value OF, the stock. Hence, the
department holds and is prepared to.
defend its position in the court that
stock dividends must.6be reported as
income and must be reported at their
market value on the day of distribu.
ton, as that is the day the income
was received" "- 90; :;
The departments attention was call
ed today to an interview which Mr..
Rosenwald granted in Chicago in
which he said. he was not richer as a
result of the melon cutting than he,
was before; that the stock was really
imaginary wealth, OF a new name for
wealth, which already existed. The
intimation was drawn from this inter-
view by officials here that Mr.. Rosen-
valid does not consider the distribu-
ton of stock in the nature Of an in
e in his personal income. Con-
sequently a general instruction will
be sent to the collector at Chicago,
as we'll as all the collectors in the
country concerning the departmental
position with respect to assessing
stock dividends as incomes. ~