Milford chronicle., 1938-12-09
5-POTNT TAX
PLAN URGED BY
DUPONT HEAD
Company President Hits
PrOfit-Sharing In Plea
For Taxation For Reve-
nue. Only.

program of federal tax policy advo
Gated by Lammot dupont, 'presiden
of the DUPONT Company, before
subcommittee of the Senate com
mittee on finance in Washington
recently.
After presenting his suggestion
Mr.. dupont said that ''if such gen
eral requirements in our tax system
are met, business should have suth
cient incentive to go ahead and hire
more people,,
Other points in the proposed pro
gram were:
simplicity of our tax laws.
Certainty and reasonable free
dom from frequent changes in the
laws
Lowest Possible Rate
"The lowest possible tax rate
based on economically administered
government activities.
"A tax system, both for individu-
ais and corporations, which does
not penalize success through pro-
gressively higher rates as the in
come increases, but which recog7
nizes that under our competitive
system profits are usually large
only where the risks have been
great, and management has been
sound and progressive"
MFR. dupont testified that he was
opposed to incentive taxation to en-
courage industrial profit sharing
because he feared there would be
danger of too much administrative
Interpretation of such tax laws and
of consequent bureaucratic interfer-
ence with the conduct of business
enterprise"
Fears Greater Uncertainty
He said that "once the principle
is established, it can readily be used
for ends definitely harmful to busi-
ness-thus creating ever greater un-
certainty"
Instead of profit sharing systems
Mr.. dupont favored high wages
based on efficient performance"
Mr.. dupont said his company paid
out approximately S20,131,OOO, OF
S50OO0,00 in net profits, in benefits
for employees during 1887, OF which
$7.593.OO represented cash nay-
ments to employees for meritorious
work
As one who is critical of profit
sharing you are one of the best pro-
fit sharers | ever saw" observed
Senator Vandenberg (R-Mich).
The witness said he has not yet
been able ITO discover what seems
to me a practicable method for the
federal government to introduce any
plan of rewards or penalties in the
tax system which will promote the
exercise of sound business judgment.
OF incentive taxation" he said that
Ito reward one line of action
through tax abatement is equivalent
to penalizing an opposite policy"
Such a plan, he warned, might tend
to encourage unwarranted expansion
in periods of rising business activi-
ty, and might. on the other hand,
tend to reward unnecessarily indus
tries which are naturally growing
RAPIDLY as compared with more sta
biliZed or actually declining indus
tries.
Profit sharing frequently has
proven unsatisfactory, he said,
some times being used as a substi-
tute for higher wages and usually
introducing an added element of un-
certainty in the workers income. He
stressed that directly or indirectly
it is difficult to share profits with
out sharing losses.
While DUPONT employees and
wages increased from 1929 to 1887,
s.o,,t ayaraua calling nrfooc da0linod
"a per cent, as compared with drop
of less than per cent for the prices
of all commodities except farm
products and foods as reported by
the Bureau of Labor Statistics" Mr..
DUPONT said.
Because of the decline in the cost
of living" he said, the purchasing
power of wages paid increased even
more rapidly, so that our real total
wages paid were actually IS per
cent higher than in 1929; and not
withstanding 20 per cent decline
in the number of hours worked per
week the purchasing power of our
weekly wages actually rose 80 per
cent"
Mr.. dupont declared the DUPONT
Company or its controlled subsidia-
ries inI1937 gave to or spent for EN-
ployees "at an annual rate of at
least $2O,OOO,O0O over and above the
nominal wages and salaries paid for
time actually worked by employees" "
Distribution of Amount
OF it, $3,249.628 was required pay
ment for unemployment compensa-
4sov and fadaraI old d0a hanaffu
under the social security act.
But there remained an annual
rate of voluntary expense around
1900 900 for various employee re-
lations plans and bonuses, all paid
for by the company" he said.
The $4,000, ,000-total was alnup
"19 per cent of the company's wage
and salary roll of approximately
$1O7. 100000"
Mr.. dupont said the company's
interest in the general welfare o.
its employees is policy OF long
standing.
"For many years the management
of the company has endeavored to
improve the employees working
conditions and to cooperate in pro-
tecting employees and their depend
ents AGAINST the results Of physical
disability, increasing age, and
death"
The $4,000. 900 included group life
insurance, pensions. benefit plan,
disability wages. full or part pay
during illness. medical department,
variations for ware roll and salary