Evening star., 1928-01-06
CORPORAT|ONSH|T
| BY TAX CUT DELAY
Executives Unable Accurately
Ito Figure Reports and Plans
] Pending Definite Action.

Z Corporation executives are hcGinninc
10 point out handicars which they say
administration leaders could not pos,
agrceti to rostrone to passage of the
new tax law until beyond March -
. For one thing. lsoSt of the 400, 900
Corporations reporting under the
Sevenue Act mugt make their annual
reports to stockholders and they can.
got do so without simply estimating
she amount Of taxes they have to pay.
They cannot vote the exact amount
cf dividends to stockholders. hut must
guess al tho sums that will 10 avail
ehle and hold them hack until after
she tax law is pa ssei
4 Entirely apart from the vast
Rmounts of the capital tina; would
otherwise hr available for re.invest-
lOent III the next three months. there
IS confusion in which SO many annual
s'rportS viii have to he prepared. All
gorporations listed on the New York
Stock Exchange for example. must
snake their annual reports available
TT least * days before their annual
meetings of stockholders.
Can Only Estimate.
& Also about half tho 400 400 corpora
sions have a net revenue of less than
So coo a year and in the bill. as
rasSed hy the House. these corpora
sJions are expected II he given certain
exemptions and preferential treat
rnen;.
& Rut this group Of corporations can
Sol take for granted that the House
hi}l has become law and make their
so:urnS Ia stockholders accordingly.
Thev viii be obliged to make their re-
ports on one basis and give an "sti-
s9nate of what they may possibly do
laIer The effect Of this IN the exec
lIiives who are in the habit OF plan
ring their Years work carefully. is
100 apparent in view Of the protesting
corpora iiors, 10 need further com
lrlenf.
4 The one thing that business exec
tltive charged with financial manage
fnant Of 4 corporation diSlikcs more
Shan anything else is uncertainty.
Md not IN know how Ia make out An
annual report 10 stockholders because
sof contingencies such as have been
fcutlined involves the nth degree OF
Jerple1itv.
There is some talk in Congress
about passing 4 joint resolution In
take rare of the corporation problem,
snaSmuch as al parties have agreed
ihat the reduction in taxes to corpora
+iipns should he made. Some mem.
hers. however, have not aha ndonesi
shore of making the new law effee-
sive from January ]. 1925. 50 il would
Tct affect current annual reports. hut
1his is not the view of the ma iority
es yet.
Exemption Issue.
uf fnS1
question that is bothering the exec.
Mutives Of the larger corporations is
sthe plan To exempt corporations with
incomes with less than IS 900 year.
il is argued that this places penalty
On successful mana cement and hurts
Nihe small siockholder, who suffers for
investing his or her savings i'm an
admittedly successful company which
siS sure 10 return dividends. In other
Swords. while The plan at bottom was
designed to favor the small business
man who Was having difficulty MAX
81 ing for his ckholders sums OF S25..
600 year. the result might he tn
diminish the opportunities Of millions
OF investors whose aggregate invest
n1ents mean more TO them than 10
the small business man. The diff
Guilty is rot unlike that which the
Treasury had In dealing with earned
40 unearned incomes, a discrinina-
ton that finally had 10 be wiped out
eitogefh her.
! II in estimated that there are Is.
4 6a9 .af0 holders of securities in the
b United States. and by the time the
4 subject cnnnez up for debate in the
Z $enaie she opponents nf any dis.
Z sfimina,otT tax are hoping IN he abie
Il 20 show that less than COO .nao per.
Z scrs would he given beneft that
< would he denied nearly $4,000 600
{ cthera.
e sopwrisht 1921