The union times., 1945-08-18
Fortune Article
 Reveals Crusade

The two year old crusade of the seIf-ctyled National Tax Equality Association seeking to discredit and destroy the cOoperatives is going badly.
 Even with funs reported by a major Wall Street invest ment firm to be so large that it is ''the best financed cam- paign since prohibition" the anti-cooperative organization has failed to line up its most natural allies in the field of business. (
 Fortune" magazine, after an eight month study of the cooper atives, sided with the coopera- tives on the main points at issue in regard to taxation. Fortune" went out of its way to point out that the cooperatives have social as well as economic values and that "the community as we'll as the individual gains by their ex isterice."
 NO TAX EXEMPTION
 A. J. Roth, manager of the com merce and finance division of the Pittsburgh Chamber of Commerce, told the annual meeting of the Pennsylvania Commercial Secreta- ries: ''In Pennsylvania the Coopera- tive enjoys no tax exemption that is not enjoyed by an unincorpor- ated business" He pointed out that ''the cooperative is free enterprise. :" And said:
 "Why there should be a sudden and bitter attack upon cooperatives is a mystery to me, except that the in roads into the sacred precincts of re- tail distribution must be their un- pardonable offensel"
 MT. Roth then explained to the Chamber of Commerce Secretaries that:
 "Cooperatives pay local property taxes.
 They pay excise taxes.
 They pay transportation taxes on the movement of goods or persons and taxes on communication serv- ices.
 They pay social security and un- employment insurance taxes.
 They pay stamp taxes, use taxes, import taxes and miscellaneous taxes on various commodities wher- ever other businesses pay them.
 ''The CoOperatives insist that their patronage refunds are not profts-they are merely Overpay- ments by their customers, which are returned to them on basis pro- portionate to their purchases
 PRACTICAL RESULT
 Fortune pointed out the practical result of the attack against the CO., ops. Already 1t has driven the various kinds of cooperatives into closer CO., operation than if they had been left alone. Already the N.T.E.A. seems to be doing more to promote the CO operative movement in the public eye than it has ever been able to do for itself"
 Describing the co-ops as ''Big Business Without PrOfit''' Fortune pointed out that four million mem bers of 10000 US. coOpcratives did $5 billion worth of business in the fiscal year l943-44. ''But the size is not the only measure of CO., operatives importance, Fortune declared' 'sTheir values are social as we'll as economic, for they bring social responsibility along with self interest. The community as well as the individual gains by their ex- istence. .. Their great economic value is in raising the standard of products bought and sold, in con- trolling prices to certain extent. in preventing mOnOpOlistic abuses ''
 On the specific points at issue Fortune reported its three-fold con clusions It disposed quickly of tht argument that the cooperative "sav- ings" are the same as ordinary cor. poration profits" and should be sub ject to existing corporation taxes b, saying:
 ''Rebates on purchases consti tnte in effect lowering of prices To the ordinary person il wouldn' seem to matter very much whether reduction in price takes place when the article is sold or severa months later. In fact, threatened with tax on their patronage re funds, some cOOperatives break Ou the cOunter-threat of sO-called ac tive price policy, i.e., price cutting so that there will be no savings an, no refunds"
 Second major argument, FOrtnn points out, is the matter of taxing un allocated reserves or savings whic the members vote to blow back ont the business instead of taking out i cash refunds On this Fortune says:
 "A tax on cooperative withhold ings would hamper only the smal growing coOperatives since the well established ones would be able l. borrow back from their members or elsewhere, all the money the want"
 The third argument Forum phrases like this, Should farm e operatives have the minor advantage fhev eniov thrO1ph Section 101 (l2