Evening star., 1950-12-12
Straight Increases
In Corporation Taxes
Favored by Business
Levy on Excess Profits
Benefits Special Group,
Columnist Declares
By Dawd Lawrence

Ing nlgner taxes as q means OF
paying for the rising costs of
defense but they want straight
increases in corporation taxes in
stead of excess-prof1ts taxes.
This is because the increase in
corporation taxes will bring in
more revenue to the Government
and will be more equitable to all
kinds of business.
The excess-profits tax, on the
other hand, will not affect ad-
versely a great number of corpora
tions with large amount of in
vested capital or with a high
average of earnings in the base
years from 1916 through 1949.
The principal reason why some of
the larger companies, too, prefer
a straight increase in corporation
taxes is because of the compli-
Gated procedures under the ex-
cess-profits taxes which make
them difficult for the taxpayer
to calculate, producing litigation,
and expensive for the Government
to administer.
Symington Talk Cited.
The major part of the opposi-
tion to the excess-proflts tax legis-
lation, however, is coming from
middle-Sized businesses. These
are the businesses which make up
the greater part of the member
ship of such organizations as the
National Association of Manu-
facturers and the United States
Chamber of Commerce. Thus, w.
Stuart Symington, chairman of
the National Security Resources
Board, in a copyrighted interview
IN United States News & World
Report" recently said:
II went out recently to talk
before the National Association of
Manufacturers. That's a good
organization and it's a lot diff
ferent from what it was years ago.
Over So per cent of their current
membership employ less than 100
people; and over 81 per cent en-
ploy less than 500 people-and
500 is considered a definition of
small business. Their president
has some 200 production workers
up in Keene, N. H. I was much
impressed with that aspect of the
change in NAM"
The definition of small business
at 500 employees is a significant
one. Most people think of small
business as the filling stations
or small retail stores with a few
employees. But middle-sized busi-
ness Is the backbone of the Ameri-
can competitive system. It is
the middle-sized business which
Is trying to compete with the So
called "oligopolies," as Chairman
Celler of the House Judiciary
Committee calls the leading three
or four companies in an industry
There are only a few hundred
or these leaders even if all the
industries are totalled up. Ger
ta1nly the bulk of the member
ship OF both the United States
chamber OF Commerce or the Ma
tional Association of Manufac-
1acurers, running into many
thousands, is middle sized or small
business. Yet the demagogues
who are anxious to bring about
a system of state socialism in
America and who are doing every
thing they can to undermine the
American competitive system by
encouraging concentration of bus
mess in few companies, charge
any groups of business as big
business" and use terms such as
"selfishness" and greed" to up
braid all groups which oppose
unfair and inequitable systems of
taxation.
Benefit to Special Group.
The excess-prof1ts tax is a bene-
Mt to a special group. 1t is a
special privilege because it per-
m1ts the more successful companies
the leading ones in each indus
try - to pay a lower rate for
every thousand dollars earned
than do the less successful bus
ineSses.
The excess-profits tax would not
have any standing in Congress at
all except for the drive put on by
the labor organizations and their
lobbies here. The idea back of the
drive was to get the excess-profits
tax passed so that the larger bus
mess especially would reduce
their resistance to wage increases.
During the last few weeks these
same labor organizations have
cried out against price increases
and have called for roll-backs of
prices but not single labor
union has called for a roll-back of
the big increases in wage scales
given since the Korean crisis
began.
Wage and price stabilization by
the Government have been over
due since last summer, and if the
excess-profitS tax law is passed,
the controls should become effec-
tive Immediately as one means
of offsetting the infiationary pres
sures that will ensue. The labor
groups have already gotten theirs
so there is little danger of roll
back. The new wage and price
staDilization agency will, of course,
be empowered to take care of
wage 1nequities," which is but
another name for wage increases.
The eXcess-profits tax passed
by the House will do far more
damage to small as we'll as middle
sized business than any of the
previous wartime laws because
the provisions are far more in
equitable and damaging to COM
petitive enterprise.
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