Imperial Valley press., 1938-04-11
News Behind
the News
URdiStributed Profits &.
Al In Viewpoint
nv RODNEY DUTCHER


ting by those vlosest to the tax
remnant of the mated undistribut-
ed piofi.s tax retained by the
House but eliminated by the Sen
ate Finance Committee is more
likely than not to be contained in
the tax law eventually enacted.
This belief has grown along
with evidence that the House is all
set to fight for the principle and
an impression that the relief
provided by the Senate's action is
only psychological.
As to the merits, that all de-
pendS on how you lock at it. Un-
der the Senate plan, a large ma
jority of American corporations
would pay smaller tax bill than
under the House bill, About 10000
of the 100000 corporations had net
incomes of less than $4,000 in 1896
and the Senate plan means a
smaller tax payment than the
House bill to all corporations earn
ing less than $6500
In the brackets between $1,000
and $4,000 the Senate plan costs
more in taxes than the House bill.
For example, on a $4,000 income
the Senate plan tax would be
about 25 per cent higher.
Over $4,000, the Senate plan is
relatively more expensive to cor
porations which pay out profits in
dividends and less expensive than
the House plan for those which do
not.
AS compared with the Senate's
Is per cent flat corporation rate,
under the House plan companies
paying out all profits in dividends
would pay 16 per cent and COM
panies paying no dividends 20 per
cent. with intermediate variations
which, for instance, would cause a
company paying out half its profits
in dividends to pay 18 per cent.
Because American corporations,
as a general average, pay out
about II per cent of profits in divi-
dends, it is argued that a larger
amount of business is being soak
ed under the Senate plan than
under the House bill.
Nevertheless, the charge that
the Senate plan is soaking small
business for the benefit of big cor
porationS which don't pay out di-
videndS is fully valid only when
the importance of roughly eSti
mated 100000 corporations earn
ing less than $6500-Which get a
break under the Senate plan-is
heavily discounted.
Inasmuch as 80 per cent of cor
porate business is done by about
Is per cent of the corporations and
corporations earning less than $25.
900 do only about 10 per cent of
the business, it can be seen that
the numerical majority of cOrpor
ationS benefiting from the Senate
plan comes far from suggesting a
true picture OF the relative effects
of the two corporation tax propos-
ais on American business as a
whole.
Corporations earning less than
$1,000 obviously do much less than
10 per cent the total corporate
business. This group is the only
bracket group in which all COM
panies-or even preponderance
of them-benefit under the Finance
Committees proposal.
The Department Of Justice for
some time now has had a definite
program for revision of the mo-
nopoly laws to make them work
better and to fit in with Supreme
Court decisions which have come
close to multiplying them. And the
SEC is about to recommend regu-
lation of Investment truSty
The Supreme Court eventually
is expected to pass on validity of
act of Congress which forbids
demonstrations before foreign en-
bassies and legations in Washing
ton. The American Civil Liberties
Union is bringing test case fol-
LOVING arrest of picketS who pa
raded in front of the German en-
bassy in protest against the alb
sorption of Austria.
Just the same, Secretary Harold
Ickes is able to conduct a one
man demonstration against Hitler
by refusing to permit export of
the helium Germany wants for
dirigibles, even in the face of tart
comment as to his tactics from
Secretary of State Hull.
It's true, as Hull says, that the
interdepartmental board control
ling American helium supplies for
peaceful purposes But Ickes is the
official who must make the con-
tract and each day the contract
becomes longer, trickier and more
unaccetable to the Germans
Ickes will leave final decision III
the helium matter to Roosevelt.
i /.