Evening journal., 1921-03-05
School
TAXPROVISIONS
Would Kill Charter Busi-
ness," Ward, Gray and
Neary Say
BILL SIMILAR TO
NEW YORK LAW

The law firm OF Ward. Gray and
Neary. after an examination Of the
tax provisions OF the proposed school
law. has sent TO each member OF the
House a letter protesting against the
provision for three per cent. tax
on the business Of corporations done
in this State.
In the letter which is a lengthy
one it is said that there was no need
for a tax expert TO draw the bill. as
IL is nearly word for word n copy OF
the New York State law The at
torneys also say that this law drove
many corporations out OF New York
and predict that under it Delaware
would lose 90 per cent. OF its char
ter business which amounted to
about $500. 600 last year The let
ter In part follows:
Dear Sir;
we have today received n printed
draft OF the school tax law. which
we understand has been submitted
in the House.
I'VE have examined this law in
the time we have had at our dis
posal, and find that II is no new
thing. # is almost word for word
(except in some provisions more
drastic) as the present law OF the
State OF New York. II took no tax
expert to take a printed copy OF the
New York law and reduce Il 20 tyne
writing for presentation TO your
honorable body. and any attempt TO
call this original work or the work
OF a tax expert Is ridiculous. II is
common knowledge among all men
who do business that the great em-
pire State OF New York. with It's
large territory and its great num-
Der OF manufacturing establishments
necessarily located there Eeographi-
cally. has, by a law practical identi-
cal TO the proposed law. driven from
its borders every corporation which
could possibly get out.
I'VE are informed that the experts
who drafted this law say they be-
lieve IL will raise two million dol
lars. We want to say TO you that
this Is theoretical and problematic.
and in our opinion not justified by
any facts The law as drafted must
look TO getting the greater part OF
the proposed two million dollars
from Delaware corporations who do
their business absolutely outside the
State The passage OF such a law
will not only kill Off the future corr
poration business OF this State,
which has been growing steadily
from year to year. but will cause
the present Delaware corporations
who pay annual taxes to the State TO
tumble over themselves in order TO
get out.
THE net result will be that in
stead OF having a steadily increasing
and TO be relied upon income.
Amounting at present to between
fourteen and fifteen hundred thous-
and dollars annually. inside of six
months the State will have lost 80
per cent OF its revenue from Della
ware corporations going out OF the
state and no new corporations COM
ing in, for the sake OF passing an
act which I'm theory may raise a
revenue OF approximately two mil
lion dollars. but the very large cor
UOIALlOnN AINNN MMNIN AAte MNHN ~
raise II will no longer be here "a
be taxed.
"In other words. the State will
give up a definite, certain, and con-
stantly increasing revenue for an un-
certain and indefinite theory. which
in our opinion, from our wide cor
porate experience. will not actually
bring into the State 20 per cent. OF
what the State now receives iron
Delaware corporations.
TT is the most unwise and ridicu
lous piece OF legislation which hai
ever come to our attention. The ne
result viii be that the State will los'
approximately fifteen hundred thous
and dollars year, which they arr
now getting from Delaware corpora
tions who do business outside OF thu
State. and will have 10 make up thi
sum 10 provide for the States need
by taxing citizens fthe State VIII