The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-03-03
new CORPORATE
/ TAX PROPOSED
!. BY ROOSEVELT
Revision of Whole Setup Is
Asked by President
in Message.
MARCH 8, 1886
Continued From Page One)

100000 in permanent revenue
which would be needed to finance
a continued farm program and the
increased amortization costs due to
immediate payment Of the bonus.
Mr., Roosevelt criticised present
corporate taxes as containing in
equalities" and leaks"
THE accumulation of surplus in
corporations controlled by taxpayers
with large incomes is encouraged by
che present freedom Of undistributed
corporate income from surtaxes," he
declared.
Equality Aim, He Says
The President said that, since
stockholders are the beneficial
owners of both distributed and I'M
distributed corporate income, the
aim, as a matter of fundamental
equity, should be to seek equality Of
tax burden on all corporate income
whether distributed or withheld
from the beneficial owners.
"As the law now stands our cor
porate taxes dip too deeply into the
shares of corporate earnings going
to stockholders who need the dis
bursement of dividends, while the
shares of stockholders who can af-
ford to leave earnings undistributed
escape current surfaces altogether"
Mr.. Roosevelt pointed to past diff
ficultieS with this problem and as
serted that repeated attempts by
the Congress to prevent this form of
evasion have not been successful"
"The evil" he said, has been
growing one. 1t has now reached
disturbing proportions from the
standpoint of the inequality it rep
resents and of its serious effect on
the Federal revenue"
Calls Proposal Suggestion"
The President emphasized that his
proposal should be treated as a sug-
gestion but said that 1.-The Treasury
Department will be glad to submit
its estimates to the Congress show
ing that this Simplification and re-
moval of inequalities can, without
unfairness, be put into practice so
as to yield the full amount of $780,
100000 - the amount I have indi-
Gated above as being necessary"
In connection with the corporate
tax, the Treasury explained that the
proposal applied to all profits with
the exception of those distributed to
stockholders but not to accumulated
sulpluses of previous years.
The Treasury pointed out that the
proposal might be expected to in
crefse personal income tax returns
since corporate earnings distributed
in the form of dividends would be
taxed as reported by individual tax
payers.
Uses Caustic Language
President Roosevelt referred in
caustic language to those who
pro1ited by return or non-payment
of processing levieS.
by far the greater part of the
processing JaXeS," he said, was
in the main either passed on to
consumers or taken out of the price
paid producers.
THE Congress recognized this
fact last August and provided
that, in the event of invalidation of
the processing taxes, only those
professors who had borne the bur-
den of these taxes should be permit
ted to receive refunds.
1.-THE return of the impounded
funds and failure to pay taxes
that were passed on result in I'M
just enrichment, contrary to the
spirit Of that enactment. A tax
on the beneficiarieS unfairly en-
riched by the return or non-pay-
ment of this Federal excise would
take a major part of this windfall
income for the benefit of the pub
lie"
Seeks to Recover Losses
Mr.. Roosevelt emphasized the diff
ferentation between the two types
OF taxes proposed. The corporate
tax change would be permanent and
intended to pay costs of permanent
additions to government expense.
The So-called "windfall' tax and
the proposed broader processing tax
would be intended only for the pur-
pose of making good Treasury
losses due to the Supreme Court
AAA decision. They probably would
apply only in the next two or three
years.
The new processing tax proposal,
Mr.. Roosevelt suggested. could be
devised to fall much more lightly on
producer, consumer and professor
by increasing the number of ccm-
modities so taxed. by greatly lower
ing the rates of the old processing
tax and by spreading the tax over
two or three years"
Termed Substitute Taxes
The President reaSserted his be-
lief that the bulk of the new tax
program represented substitute"
taxes.
we are called upon" he said
ito raise by some form or perma-
nent taxation an annual amount of
$620,000000. 1t may be said. truth
fully and correctly, that S500OOO,-
600 of this amount represents sub
stitute taxes in place of the old
processing taxes and that only
$l20,000o00 represents new taxes
not hitherto levied"