Evening star., 1928-11-18
Income Tax Reports
Disclose Prosperity
BY HARDEN COLFAX.

No golden wand hovers over corporate
form of business: no magic attaches to
the mere term, although it does pos
seSs, In many cases, certain legal and
some commercial advantages. Not
more than 56 per cent Of all the corpo-
rations in the United States enjoyed
any net income last year, and less than
third had net incomes of $4,000.
There are more individuals who have
incomes of 100000 and over than there
are corporations with net incomes in
this class, in the ratio of 1O,367 to
9,54e, as revealed by preliminary sta
tisticS made public last week by the
Internal Revenue Bureau embodying
income tax returns filed this year up
to August 81 for 1927 operations. Yet
the number of corporations is increas-
ing steadily. At the same time, there
are more million-dolla net-income cor
porations than individuals with incomes
of a million dollars year-96l to 283.
Compared with returns for 1926
operations filed to August 81, 1927, the
| report just issued shows that individual
net incomes during last year increased
81 ,008, 100000 to $40 2,573, 100000. while
corporation net incomes decreased
81 ,l44, 600, 900 to So. .068, 900 900, yet cor
porations were assessed Federal income
taxes aggregating $l.o07, 100000 this
year, to the date specified, contrasted
with $500, ,OOO, 900 for individuals, which
affords an explanation for the almost
constant agitation for revision of the
corporation tax schedule. incidentally,
16 per cent of the incomes reported by
individuals we're attributed to dividends
from corporations.
~
The mental picture of the situation
of the corporations should not be
painted too dark. The fact that
corporation fails to have net income
does not mean necessarily that it is
on the verge of bankruptcy, or even
that 1t has failed to pay a dividend.
In 1925, for which complete figures now
are available, corporations which re-
ported no net incomes nevertheless paid
cash dividends aggregating $415, ,00O,-
600 from surplus and other sources.
To August 81, $4,000 corporations
had filed their income tax reports for
1927 operations, of which $4,000 en-
joyed net incomes aggregating $685.
600, 900 and 20S, 900 had no net incomes,
but deficits aggregating $2,3ll 900 600.
To the same date last year, for 1916
operations, 4l2,000 corporations nad
filed returns, 248,000 having net In
tOIalALl6 0osSA 1,VOOBuUO 80.
600 reporting deficits Of $2,052 ,000, 600.
While 55l7 per cent of the corpora
tions reporting to August 81 this year
show net incomes. the proportion prob
ably will decrease rather than increase
on final tabulations. To the same date
a year ago, 6O20 per cent OF the corpo-
ration returns reported net incomes
vet when the year closed and $4,000
belated returns had been aooeo, the
percentage dropped to $3.50.
~
Manufacturing corporations as
whole Jared somewhat worse In lsZI
than in 1925 in the proportion wnlcn
made a net income, 57.S8 per cent OF
the SO 900 in that class filed to August
81 being In that happy situation, con-
trasted with 5000 per cent OF those
filed during the full year previously.
By major divisions. the preliminary
report shows that last year 81 per
cent in the food field. SO per cent In
beverages and tobacco, so IN textiles,
SO In leather, SO In rubber goods, o.
in lumber and wood, 81 In paper, 81
In printing and publishing. 81 IN petro..
leurn, So In chemicals, So in stone ana
clay and glass and Sc In metals report
ed net incomes.
(c;opyright, 1921