Evening star., 1947-11-24
Exemption Of $4,000
On Income Tax Urged
For All Corporations
By the Assoeioisd Press

lax cAclllpGlOlI VII VIC llSC
$25, 900 of income of all corpora
tions. was proposed today by
Chairman PloeSer of the House
Small Business Committee to
settle "the Nationwide contro-
versy over the tax exempt privi-
lege of co-ops"
Tax exemption now enables co-ops
to grow far more effectively" than
privately owned business, he said.
Mr.. Ploeser estimated before the
House Ways and Means Committee
that a $25,000 general exemption
would put on an equal competitive
basis as much as 80 per cent of all
corporations, whether proprietary or
co-operatives"
Many small businessmen have
contended, in statements before the
Ways and Means Committee. that
the special tax treatment of co-ops
gives these organizations an unfair
competitive advantage over the
private businessman. The co-opera-
tive enterprises are formed by
groups to save on buying and mar
keting.
Urges Tax on Co-ops.
Under present corporate tax law
the first $1,000 Of net earnings is
taxed at 81 per cent. between s., 900
and $1,000 at % per cent, $4,000 to
$25 900 at Is per cent, $25, 900 to
Of
600 at SO per cent.
Mr.. Ploeser proposed that the first
$25 900 of net earnings, for privately
owned corporations and co-ops. be
exempt from taxation, and that
earnings over $25, 900 be taxed alike.
Mr.. Ploeser said actual figures
from coop records clearly prove
that tax exemptioun does permit CO.
operative enterprises to grow far
more effectively than proprietary
enterprise
Approves Farm Co-Ops.
AS for an overall opinion of CO. ops,
he said:
Il am convinced-and I am glad
to say this publicly-that farm CO.
operatives where not monopoliStic,
seem to be a logical part of q COM
petitive capitalistic profit system.
But I have not been able to de-
termine in my own mind as yet, in
what kind of an economic system
the urban consumers cooperative
finds its natural and logical place.
1t is my determination, however, to
learn through the further progress
Of our study on co-operatives
The Ways and Means Committee
is delving into coop tax treatment
as part of an overall study looking
toward a general revision of the tax
statutes. 1t has not indicated what
revision, if any, it will make in CO.
op taxes. 1t has held hearings ex-
tensively recently.
Six Million Cut in Rolls.
Earlier, movement Of undeter-
mined strength was reported afoot
to write into the next tax-cutting
bill a provision which would remove
about 100000 low-income persons
from the tax rolls.
Chairman Knutson of the House
Ways and Means Committee said
the new $4,OOO,O00 900 tax-slashing
measure he will introduce in mid
December probably will include no
such provision.
But" he told reporters. 'it might
be written into the bill when it
reaches the Senate"
Plans Community Property Clause.
Mr.. Knutson said his new measure
will embody percentage cuts for all
the 48.500,000 taxpayers, as did the
two previous bills President Truman
killed with vetoes earlier this year
Plans Community Property Clause.
However, the Minnesotan plans to
add q provision for nationwide ap-
plication of the community property
principle This, allowing husbands
and wives to divide the family in
come equally for tax reporting pur-
poses, now is permitted in 13 states
by local law. 1t results in lower taxes
for many persons.