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VICIOUS TAX LEGISLATION LEGISLATIONThe The Ways and Means Committee frankly states its purpose in having a 50 per cent higher corpora ¬ tion income tax on undistributed earnings than on distributed earnings That purpose is what we suggested the other day it must be It seeks to drive out in dividends virtually all of any com ¬ panys earnings KO that the government can take still other whacks at those earnings both with excess profit taxes and then again with super ¬ taxes on the incomes of those who get the dis ¬ tributed earnings as dividends dividendsHut Hut a government tax that will thus drive earn ¬ ings out of a business where they are imperative to its safety is the most vicious and dangerous tax that can be devised A tax that gives surplus earnings the choice between confiscation and dissi ¬ pation abroad tickets business straight through to hell hellIn In behalf of the committee au example is given of the fairness of this penalty tax 18 per cent on undistributed earnings as it would affect a cor ¬ poration earning 100 per cent on its capital But for every corporation in this country that earns 100 per cent on its capital there are hundreds perhaps thousands that do not earn 20 per cent 15 per cent or even 12 per cent centFurthermore Furthermore only the densest ignorance of busi ¬ ness soundness and safety could ignore the horse sense fact that whatever its capital any indus ¬ trial or commercial enterprise must win or fall on the margin it makes or loses oil the amount of business it does doesAny Any business to be safe must earn a sufficient profit on the business it does to insure against the times of stress when it cannot get through with any profit at all Any business which makes fair prof ¬ its on its turnover must keep some of them uu spent and ready to use when storms burst There must be an ample reserve for expansion improve ¬ ments renewals etc or the company must always be running to the money lender for rescue rescueFor For men in Congress not to know these simple truths familiar to any intelligent clerk in the counting room of a commercial house shows their iueompetency to deal with any business question much less the crucial question of taxation of in ¬ dustry of commerce of bread and butter They dont know enough about business laws and princi ¬ ples to legislate for business They dont know enough about any side of business to run a peanut stand New York Sun
