Study Double Dividend Tax Reduction Bv

It is reliably reported from Washington that congressional and treasury experts have decided to try to get Congress to do something next year about Couble taxation of corporate dividends.

Today and for many years past, as we all know, corporations pay income taxes on their profits, and pass the remainder out to their stockholders in dividends, and the stockholders receiving these dividends must then pay individual income taxes on this income.

Some call it double taxation; some, more honest and frank in such matters, say that it is forbidden by one of the Ten Commandments of a certain Moses which reads: "Thou shalt not steal."

Of course such trick methods of abstracting his dough from the pockets of Mr. John American have been going on in various forms ever since the New Deal came into existence. For instance, the government goes into the pocket of some fellow who is sweating his head off to make a living, and deducts money for income taxes; and then that same government takes some of that money thus secured and hands it over in the form of a subsidy to some man who is twice as well off financially as the sweating worker. Thus we have literally armies of men driving secondhand Chevrolets who divvy up their slim earnings with men driving Cadillacs.

This should be covered by that same Commandment concerning double taxation of dividends.

Of course, right away they raise the simple question, "Can the Government get along without the income derived from this double taxation?" In fact, that seems to be the only Doubting Thomas involved in this proposition. Which marks the vast difference that exists between the individual citizen and the Government which is made of citizens in mass. If it should be found that an individual was grabbing money that did not belong to him, would they stop to ask if he could get albng without it before depriving him of further loot?

They would most definitely and certainly NOT. But in the case of double taxation of dividends the right or wrong

Jack Dionne

of the matter is never mentioned. They simply want to know can the looter get along without the loot?

So there is no thought of entirely eliminating the double taxation of dividends in the studies being made in Washington, because so great a loss-they say it would be ten billions a year-would literally jar Uncle Sam's financial back teeth loose in their sockets. The scheme of improvement most mentioned would be to give individual taxpayers a tax credit of a certain percentage of their total dividend income. The exact percentage has not been announced and will; so they say, depend on how much income the experts figure the Government can afford to lose in this direction.

They would like to allow a full ten per cent credit. That is, a taxpayer would include his total dividend income in his taxable income, and then deduct from his tax liability an amount equal to ten per cent of the dividend income he included. However, this woud cost the Government a loss of three quarters of a billion dollars a year, and they say, do these experts, that Uncle Sam can't afford such an extravagance right now.

It is said that there will probably be recommended to the Congress some sort of reduction of dividend taxes that will cost the Government no more than $400,000,000 yearly. llowever, it is thought by all experts reviewing the subject, that a start should be made that airns at the final elimination of double dividend taxation sometime in the future, but that the process should be gradual.

All the investor groups who testified during House Committee hearings on this subject last July, urged Congress to make a start in reducing double dividend taxation, as a way of stimulating private investment in American industries. They thought that the immediate revenue loss would eventually be offset by new tax revenues resulting from the stimulus business would get from the program.

Lou Holland, Roddis California, Inc., Los Angeles, re'turned last week from an extended visit to the company mills located in Humboldt County. Holland is sales manager of the lumber division for the concern in Southern California.