Evening star., 1947-09-03
Living Costs Reduced
By Rebate System,
GreenbeIt Coop Says

the practice of turning back a por-
tion Of profits in the consumer CO.
operative to members was helping
to hold down the high cost OF living
and that private corporations could
follow the same custom II they
chose.
Their view was announced fol-
lowing release yesterday by the
House Small Business Committee OF
q tax survey that held the coop
paid less than 80 per cent OF the
Federal taxes in the past seven years
it would have paid as a private cor
poration.
The committee, after two-day
hearing last month, found the coop
was operating a monopoly in the
nearby Government-planned COM
rhunity at the expense Of private
business which was prevented from
erecting stores in the business dis
trtct.
Centers on Rebates.
The latest development centered
on the co-op's practice Of making
|2k per cent rebates-formally
known as patronage dividends-on
all purchases made at the coop
stores during the year. Amounts
paid out in rebates are not subject
to taxation.
The committee report, prepared by
Willis J. Ballinger, special economic
counsel of the group, stated:
"One of the important issues in
volved in the committees study OF
co-operatives is whether co-opera-
tive corporations enjoy tax exemp-
ton privileges which impose an
unfair burden on privately owned
corporations.
"The chief complaint of the crit
les of cooperative tax exemption is
that the Federal tax on corporate
income Is unfair to private corpora
tions in that wholly tax-exempt CO.
operative corporations pay no cor
porate income taxes and non tax
exempt cooperative corporations dc
not pay as much under 1t to the
Federal Government as private
corporation with q comparable net
income"
Coop Issues Statement.
A statement issued last night by
the coop declared: "One conclusion
the committee might have drawn
from its table, but did not, Is that
over half the net savings Of the
cooperative over the past seven
years were refunded to It's Gus
toners. We think that If other
private business would follow this
practice, our economic system and
all free enterprise would be in a
much healthier state"
The committee strangely ignores
the conclusion Of the previous House
Small Business Committee that
non tax exempt co operative are
subject to all the taxes normally
assessed against comparable nom
CO - operative organizations" the
statement pointed out.
Albert Aren't, attorney for the
Greenbelt group, declared that 'if
Greenbelt Consumer Services paid
less taxes than other corporations,
1t was striving to keep down the
high cost of living through refund
ing as large a part of its gross re-
celpts as possible to its customers. "
Amazement Expressed.
The attorney also implied that
the committee had fallen down on
its promise to allow the coop to
reply in the record Of the recent
hearings to the tax study release
yesterday.
ITO our amazement, the commit
tee has now released its biased
analysis to the press without await.
ing completion of any formal rec
ord Mr.. Aren't asserted. He added :
The committee seems to be i'm.
proving upon the pattern which It
set at the oral hearings, when II
had it's conclusions typed up and
ready for the press before the hear
ings were concluded"
| Figures in Tax Study.
The tax study, made by William
j. Warmack, a certified public ac-
countant hired by the committee
estimated the coop paid $25, 200 in
Federal taxes between 1910 and 1916
If the organization had been q
privately owned corporation, 1t
would have paid $85, AT in taxes
during the same period, the study
said.
Mr.. Aren't quoted a recent study
Of the patronage dividend question
made by the Commerce and Indus
try Association of New York, Inc,
which stated: ANY Lewiston to con-
strue patronage dividends as income
to the cooperative, while price ad-
justments by private corporations
are recognized as costs, Of opera
tions, would result in confusion Of
existing practices"
Meeting Is Called.
Meanwhile, a group calling Itself
the Greenbelt improvement Asso-
citation called on residents OF the
community to attend q meeting at
the Greenbelt Center School TO-
night to hear "the true facts" on