Toledo union journal. [volume] (Toledo, Ohio) 1942-current, 1950-01-20
fis fi;s'i 1..s. ns It's PENSIONS S::.er S::

Presidents and the CED's budgets, not only
in figures but in language.
The CED, for instance, strongly supports
many of the Presidents programs for such
things as expanded social security and appro-
priations for health and education. 1t wants
spending to continue for needed public works
that will increase the productive power of the
country. It's budget would not be balanced
until economic conditions improve.
These are not New Deal businessmen. They
are big middle-of- -the-road businessmen such
as Marion B. Folsom, of Eastman Kodak; J.
Cameron Thomson, a Minneapolis banker;
John D. Biggers, of Libbey- Owens-Ford Glass
Co; S. Bayard Colgate of the soap company;
Ernest Kanzler, of Universal Credit Corpora
ton; CIarense Francis, of General Foods; and
George L. Harrison of New York Life, to name
only a few.
The position taken by these businessmen
gives strong hope that meeting of the minds
between business and labor leaders on major
economic policy Is not far off Enlightened
businessmen are beginning to realize that the
public policies for which labor has been stand
ing are good not only for labor but also for
the whole country, business as well as labor.
In view of the enlightened attitude taken
by the CED businessmen on spending policies,
labor leaders and economists should take an
other look at their proposal for cutting taxes
on corporations which most labor leaders
would reject as quickly as the NAM would
turn down labor plan for spending money.
What the CED has proposed, in addition
to cutting the excise or sales taxes, which
labor would also like to cut, is this: It pro-
poses to withhold taxes on dividends just as
employers withhold income taxes for work.
ers from pay envelopes This would provide
a system of current collections on dividends
just as the government now collects currently
as you earn on your income.
The Joker, if any, is that what the corpora
ton collects and turns into the government as
taxes on dividends could be subtracted from
the taxes the corporation pays on its earnings.
At the present rate Of declaring dividends this
would mean cut of 20 per cent, or perhaps
little more, in corporation taxes.
For example, take a corporation which
makes a profit of 81 100000 and pays divi-
dends of S500000. At present it pays 38 per
cent on the million dollars, or $4,000 I'M
der the new plan it would continue to pay
$3.50, ,0O0, but S83 900 Of this would represent
collections in advance on the dividends paid
to stockholders. The corporation would be
paying this S83 900 for the stockholders in
stead of having them pay the tax themselves
as at present In the end the stockholders
would pay exactly the same as they do now
But the corporation, instead of paying taxes of
$3.50, ,000 would get credit for the S83 900
and pay only S297 900. This would be a cut
of % per cent in its taxes.
This plan has been proposed by the CED
means of curtailing the so-called double
taxation of corporation earnings. AT present
the corporation pays 38 per cent on its earn
ings, and the remaining earnings when they
reach stockholders are again taxed under the
personal income taX-sometimes as high as
20 or 80 per cent The result is that some
stockholders realize very little on their in
Vestments
Students Of progressive taxation have
long favored greater dependence on personal
income taxes, which can be graduated accord
ing to ability to pay than on corporate taxes
which cannot be so graduated The CED pro-
posal is a move in that direction, which the
businessmen believe will provide an incentive
for greater business investment without chang
ing present personal income tax rates.