The people's voice. [volume] (Helena, Mont.) 1939-1969, 1945-05-11
TESTIMONY
AGAINST NTEA
SUBMITTED

CHICAGO-The National Tax Equal
ity Asosciation's widespread attack Oh
farmer cooperative associations, il
was charged, has for its goal neither
equality nor equity in taxation, but
punitive measures directed against a
successful competitor" The charge
was made in statement filed April 27
with the house ways and means COM
mittee in Washington by the National
Association of Co-Operatives, with
headquarters in Chicago.
R. Wayne Newton, manager of the
Coop organization, who signed the
statement, explained that the Nation
al Association of Co-operatives repre-
sents twelve of the larger regional
farmer cooperative associations whose
business operations through state and
local units, blanket the rural areas
virtually from coast to coast.
Newtons statement was a whitening
reply to recent attacks on farmer CO.
operatives by the National Tax Equal
| ity Association of Chicago which is
seeking removal of tax exemptions
uOW dNdlldDlC W lICl CO-OpCl dllfCO,
on the contention that such exemp-
lions give the co-ops undue privileges
and advantages over competing bust
ness.
NTEA, Newton charged "has en-
ployed flag waving and malicious red
herring propaganda technique to in
flate purely selfish competitive issue
in a restricted field into a matter of
utmost national concern. 1t is des-
perate attempt to frame case against
the Co-ops."
He questioned that the urgency of
NTEA's quarrel warranted much seri-
GUS consideration by congress at
of primary national concern.
Co-oeratives, buying and selling for
their patrons at cost can have no in
come, Newton insisted. This principle,
he declared, has been established by
law, administrative rulings and court
decisions. The latter he said, have
recognized that where a corporation
obliges itself to return all or part
of net margins to patrons, these re-
funds are not income to the corpora
ton but income to the patron.
"Since it is impossible to tax in
come where no income exists" he con- |
tinued "NTEA's contention that in
come of the co-operatives should be |
taxed is fundamentally illogical and |
flouts the 18th amendment. 1t cannot |
be supported without attacking the
very basis of the cooperative method |
of doing business. In holding to this |
position NTEA is as much the enemy /
of the urban business mans co-opera-
tive and mutual agencies as of the
farmer co-ops."
NTEA's claim that a Coop adds
taxes to selling price but keeps the
tax for its own account" Newton
as "a canard which un-
dermines the claims by business that
high business taxes have prevented
normal accumulations of reserves and
threaten the postwar economy"
Every dollar of Coop dividends or
he reiterated, increase the
farmers net income and is subject
to income tax at the farm level"
Newton challenged NTEA's claim
that it represents 100000 business
men. II true, he said, it means that
NTEA speaks for two out of every
hree manufacturers, wholesalers, re-
alters, distributors, tradesmen and
professional businesses and all Incl
lental business operations carried on
n the entire United States in an
average year
This exaggerated claim" he con-
inued, "raises doubt that NTEA rep
'esents any impressive segment of