The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-03-27
PROFIT TAX IS OLD IDEA

L VERY time apparently new idea is introduced
~ into New Deal philosophy--and they have
tumbled over each other in the last few years
Washington begins to look for the author.
So it is now with President Roosevelts pro-
posed tax undistributed corporation earnings.
And as in many other cases. the idea is found to
be an old one
AS far back as 1917, when the war; time tax bill
being framed, legislators struggled over tax
on undstributed dividends. 1t was proposed to the
Senate Finance Committee by sthe late Senator
Andrieus A. Jones 3D., N. M, who must be given
large credit for promoting plan which is re-
vived nearly 20 years later.
The persistent New Mexican kept at it until in
1924 the Senate adopted one of the numerous vara-
tons of his plan, but it was thrown out in confer
ence between House and Senate
Perhaps most influential in revving the tax now
is Robert H. Jackson, formerly counsel of the In
ternal Revenue Bureau and now Assistant At
torney General in charge of tax cases. At least he
has been its most effective public champion and
has best expressed the fundamental philosophy I'M
DERIVING it.
Rich men, heads of great corporate enterprises
became aware of Mr.. Jackson year ago when he
championed before Congress share She-wealth"
tax plan, only to have it toned down and emascu-
lated by the legislators ct did, however, have the
effect of pricking the share wealth" balloon
which the late Senator Huey Long was floating at
the time).
Inquring about Mr. Jackson, they discovered he
was comparatively young and prosperous lawyer
from Jamestown N. Y, who had been drafted into
the New Deal and who tried his wings first in
court battle with Andrew w. Mellon.
In delving into the Mellon income tax case, he
learned something of the ways that rich men, with
the aid of able lawyers get around their taxes
which is one reason for the proposed tax on I'M
distributed dividends
The first proposal of the late Senator Jones back
in 1917 called for is per cent tax in addition to
regular corporation income taxes on undivided earn
ings exceeding 20 per cent of total income This
was approved by the committee but was so modified
later, when the bill was recommited that it proved
ineffective.
He tried variations on his proposal one of which
in 1921 was almost identical with that now sug-
gested by President Roosevelt until in 1924 he won
the victory in the Senate which was later nullifed
in conference. That was the nearest it came to
enactment.
The 1924 proposal was for graduated surtaxes on
undistributed profits and it received the votes of
81 Senators still in Office today Four who are still
in the Senate voted against it, four others here
now did not VOTE
Senator Jones claimed no credit for the 1924
plan, which was almost like the present Administa-
ton proposal
He revealed that the idea was suggested by the
National Association of Credit Men, which. in a
comprehensive report Oh the whole subject of Fed
eral taxation, recommended elimination of the excess
profits and capital stock taxes, as proposed now.
and substitution of corporation undistributed earn
ings tax at graduated rates with dividends subjected
to normal taxes in the hands of the individual.