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■ j 1 ► Breeders Group, Thoroughbred Club Oppose Tax Legislation Protest House Proposal to 4 Prohibit Hobby Farmers Deducting Farm Losses By HUGH J. McGUIRE Staff Correspondent LEXINGTON, Ky., May 16.— The National Association of Thoroughbred Breeders, the Thoroughbred Club of America, and the Lexington Chamber of Commerce have gone on record as militantly opposed to the tax legislation being considered by the House Ways and Means Committee, which would prohibit so-called "luxury" or "hobby" farmers from deducting farm losses from their gross incomes for tax purposes. While the proposal does not specifically mention Blue Grass thoroughbred breeders, it is felt here that it is pointed directly at them. The tentative decision of the Ways and Means Committee as reported in the daily digest of the Congressional Record for May 3 was as follows: "To disallow business deductions to the extent that they exceed gross income from an enterprise I unless the taxpayer can establish by a clear preponderance of evidence that the business was conducted primarily for profit and not for his personal gratification where the taxpayer has carried on business for five years with an aggregate net loss for the five-year period of more than 0,000 if the expenses attributable to such business exceeded the gross income therefrom in three or more of the five years, for each of these five years and for the current year." Would Limit Deductions to ,000 a Year Many Blue Grass thoroughbred and stock breeders receive their incomes from sources other than their farms and their investments in breeding are looked upon as one of the bulwarks of the industry. The proposed legislation would limit such tax-exempt losses to ,000 a year, a negligible sum in the operation of a first-class breeding establishment. The eventual effect on racing itself would be tremendous. Jack W. Denis, president, and Grant A. Dorland, vice-president and treasurer of the NATB, thoroughly aroused by the far-reaching effects such a measure would have on the breeding industry, have wired their affiliates and other thoroughbred interests in several states the following telegram: "House Ways and Means Committee has tentatively approved the ,000 loss limitation on breeding, racing, etc. If j finally approved, House and Senate will | next consider. If adopted, this means chaos and terrific loss to breeders. Imperative that your members again contact your representatives on Ways and Means Committee. Also have your members contact their Washington representatives and senators. If help of farm organization available, please use it." Dan W. Scott, president of the Thoroughbred Club of America, stated that the organization he heads will take decisive action to defeat passage of the measure. Scott pointed out that wide circle of people other than those directly in the breeding industry would be affected. He named the feedman, and thus the farmer, veterinarians, blacksmiths and merchants among those who would be hit indirectly in the event the proposed legislation drove out of business the affected breeders. Chamber of Commerce Meets Today Ed Wilder, executive secretary of the Lexington Chamber of Commerce, said that passage of the measure could mean the breaking up of large breeding farms into cultivation in competition to general farming and that it would ruin the tourist trade and result in the withdrawal of millions of dollars spent in development of breeding farms. The legislation would also vitally affect breeders of purebred cattle and other stock and the chamber has called a meeting for Thursday at 3 p. m. which will be attended by representatives of the County Farm Bureau, the Burley Tobacco Growers, the Thoroughbred Club, the Farm Managers Club and other interested groups. Grant Dorland, of the NATB, stated that his group was thoroughly aroused to the danger of passage of the proposal and had started action among its affiliates and potential members throughout several states some three weeks ago. He reported that results from this action were being felt but that it was necessary for all other interested bodies to unite at once by communicating with their representatives and senators. Republican members of the House Ways and Means Committee are as follows: Daniel A. Reed, New York: Roy O. Woodruff, Michigan: Thomas A. Jenkins, Ohio: Richard M. Simpson, Pennsylvania; Robert W. Kean, New Jersey; Carl T. Curtis, Nebraska; Noah A. Mason, Illinois; Thomas E. Martin, Iowa; Hal Holmes, Washington. ! and John W. Byrnes, Wisconsin. Democratic members are Noble J. Greg- JACK W. DENIS — President of the National Association of Thoroughbred Breeders and who is voicing a strong protest against the proposed legislation now before the House Ways and Means Committee. ory, Kentucky; Robert L. Dough ton. North Carolina; Jere Cooper, Tennessee; John D. Dingell, Michigan: Wilbur D. Mills, Arr kansas; A. Sidney Camp, Georgia; Aime J. Fordan, Rhode Island; Herman P. Eber-harter, Pennsylvania; Cecil R. King, California; Thomas J. OBrien, Illinois; J. M. Combs, Texas; Hale Boggs, Louisiana; Eugene J. Keogh, New York; Walter K. Granger, Utah, and Burr P. Harrison, Virginia.
