The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-22
BICNESS LEVY
TO BE PUSHED
DESPITE RULING
Wheeler Demands Gradu-
ated Tax on Net Return of
Capital Investment.

BIZ Scripps-Hoicard Newspaper Alliance
WASHINGTON, March 22.-The
Supreme Court has decided, six to
three. that a tax on the bigness Of
corporations is unconstitutional, but
supporters of the Federal "bigness"
tax currently sponsored by Senator
Wheeler Cd, MONTH nevertheless
found in the decision today encour-
agement for believing their proposal
valid.
The court decision throwing out
Kentucky'S gross sales tax also dis
closed the first instance this year
of Chief Justice Charles Evans
Hughes and Justice Owen j. Rob-
ertS, the courts "middle-of the
readers voting with the four con-
sentative justices instead of the
three liberals.
Friends of the Wheeler proposal
pointed out that the majority'S de-
cision was based primarily on the
objection that the tax was levied on
gross sales, not gross collections or
gross revenue. The plan which Sen
ator Wheeler intends to offer, as a
rider to the first tax bill which
comes from the House to the Senate,
proposes a graduated tax on met
capital return"
From 2 to rs Per Cent
This tax would start at 2 per cent
on net capital return between So
DOOR and $3,5OO,OOO and graduate
upW ID to rs per cent on all net
capital return in excess of $780,
100000.
The liberal dissent by Justice Car
dozo in the Kentucky case, speak
ing also for Justices Brandeis and
Stone, expounded at length the jus
LITIGATION for taxing business units
on their size and the increased adj
vantages accruing to large shops
merely because of their size.
THE big shops having ample cap
ital can get the best locations"
Justice Cardozo said. THE big
shops can produce economies i'm
possible for small ones. The big
shops acquire prestige that makes
customers eager to buy of them.
Here and there they can even
charge a little more than others,
at least for high-priced goods, or
goods not wholly standardized, and
the buyer will ignore the difference.
Sees Legislatures Checked
"a crippling result" he said Of
the majority decision, will be that
hereafter "in the taxation of busi-
ness a Legislature will be confined,
it seems, to an income or profit tax,
if it wishes to establish gradual
ed system proportioning burden to
capacity"
The dissent pointed out the diff
f1culties of establishing profit and
pue s9!lInoW!p 9s7q4, lBQl p9lu9m
income for tax purposes, and COM
diana chain-store case, in which
within a Procrustean formula"
The three liberals cited the IN
graduated tax bore more heavily per
unit upon the chain-storeS than on
Independents, to support their case.
In that case the liberals won the
decision by gaining the support Of
Justices Hughes and Roberts.
Justice Roberts, who wrote the
majority decision here, distinguished
between the two cases by saying
Kentucky's law sets up a different
kind of tax classification. He held
the operation of the law "unjustifi-
ably unequal, whimsical and arbi-
trary, as much so as would be tax
on tangible personal property, say
cattle, stepped up in rate on each
additional animal owned by the tax
payer, or tax on land similarly
graduated according to the number
Of parcels owned"