Business And The Tax Situation

As this issue goes to press, any business man who is happy over the tax situation properly belongs in the booby-hatch. Various very definite tax-threats join to make him look solemn.

High on the list of tax matters that might keep him from sleeping too soundly at night is the threat of retroactive taxes. The Houseand Senate Finance Committees have voted to raise the maximum income tax rate on profits of corporations from 47 to 52%, and to raise the ceiling on combined income and excess profit taxes f.rom 62 to 70%, and to make the increases retroactive to January first, 1951.

It is not impossible that the retroactive provision of the coming new tax bill will be eliminated, or that a later date may be used. The Senate Committee could change its position in the matter, or the alteration could be made on the floor of the Senate. But if neither of these things happen, then the retroactive clause in the bill will go, and incorporated business is not going to enjoy it a bit. If the bill goes into efiect October first, as planned, then a l?-month tax increase will be loaded on the profits of the last three months of the year. Frankly, hopes for a change are dim.

Taxing retroactively is considered bad in morals and in principle; two matters that are not considered over-important in Washington these days.

With regard to proposed corporate income tax rates, Senate and House measures in their present form differ only as to the increase on income of $25,000 or less, the Senate proposing to raise it from 25/o .to 27/o, while the House bill would make it 30/o.

And then there is another cute little tax trick that hangs over the head of businessmen; a withholding tax on dividends. Competent authorities in Washington say that there is about a 50-50 chance of this going into effect as part of the big new tax bill. The House bill proposes to place a 20/o withholding levy on dividends, royalties, and interest paid by corporations on their securities. This scheme was rejected by the Senate Finance Committee. Senator George, Chairman of the Senate finance group, was in favor of the withholding tax on dividends, but his committee outvoted him. The matter will be settled in conference between the Senate and House committees.

The proposal in this matter would require employers to withhold the tax, and pay the 20/o direct to the Treasury. Dividend receivers would take this into account when filing their tax returns.

New Shingle MiU

A. C. Anderson, and his two sons V. G. and A. W. Anderson, have started a new shingle mill at Brownsville, Oregon, under the name of the Triple A Shingle Company.

This full po9€, four-