WELL-HEELED ANTI-CO-OP DRIVE FLOPS
Campbell, Wallace J.
Well-Heeled Anti-Co-op Drive Flops By WALLACE J. CAMPBELL (Editor, Cooperative League News Service) THE two year old crusade of the self-styled National Tax Equality Association seeking to...
...The community as well as the individual gains by their existence...
...He pointed out that "the cooperative is free enterprise...
...Already the N.T.E.A...
...But size is not the only measure of cooperatives' importance," Fortune declared...
...They pay stamp taxes, use taxes, import taxes and miscellaneous taxes on various commodities wherever other businesses pay them...
...Second major argument, Fortune points out, is the matter of taxing unallocated reserves or savings which the members vote to plow back into the business instead of taking out in cash refunds...
...Well-Heeled Anti-Co-op Drive Flops By WALLACE J. CAMPBELL (Editor, Cooperative League News Service) THE two year old crusade of the self-styled National Tax Equality Association seeking to discredit and destroy the cooperatives is going badly...
...A. J. Roth, manager of the Commerce and Finance Division of the Pittsburgh Chamber of Commerce, told the annual meeting of the Pennsylvania Commercial Secretaries: "In Pennsylvania the cooperative enjoys no tax exemption that is not enjoyed by an unincorporated business...
...The U. S. Rubber Company recently sent out a memorandum deploring the current attack on the cooperatives...
...Fortune went out of its way to point out that the cooperatives have social as well as economic values and that "the community as well as the individual gains by their existence...
...Any corporation that elects to, may do business on the same basis (as a cooperative) by refunding its profits to its patrons," V. S. Rubber said in its Sales Cultivator...
...Fortune Magazine for August, after an eight month study of the cooperatives, sided with the cooperatives on the main points at issue in regard to taxation...
...Concluded the magazine of business: "Cooperatives are not more 'radical' nor more 'conservative' than corporations...
...In this simple statement is embodied the fundamental mistake of the NTEA...
...Even he will be satisfied if cooperatives constitute a large enough part of the economy to police private corporations, to act a* the balance wheel in a system of free enterprise.'' * * * THE point at which the attack on the cooperatives is really being effective according to cooperative officials is the general impression which is being spread that cooperatives pay no taxes...
...Victor Emmanuel, president of the Aviation Corporation and director of Republic Steel, Standard Power and Light Company, and several other corporations issued a personal appeal to business to give up its divisive attack on the cooperatives...
...On the whole, however, Fortune's treatment was eminently fair...
...The third argument Fortune phrases like this, "Should farm cooperatives have the minor advantages they enjoy through Section 101 (12) of the Internal Revenue Code...
...In the meantime, there is little doubt that farm marketing and purchasing cooperatives will continue to grow, and consumer cooperation, particularly if it has labor-union backing, may increase sharply...
...They pay transportation taxes on the movement of goods or persons and taxes on communication services...
...Roth then explained to the Chamber of Commerce Secretaries that: "Cooperatives pay local property taxes...
...They pay social security and unemployment insurance taxes...
...N.T.E.A.'s propaganda has been so successful in this score that many businessmen and the public at large are being led to believe that cooperatives are "tax dodgers...
...Their values are social as well as economic, for they bring social responsibility along with self-interest...
...Said industrialist Victor Emmanuel : "The cooperative is a corporation with one important difference...
...To meet this whispering campaign the Kansas Cooperative Council has made a survey which' showed that our local cooperatives in Kansas paid 24 different kinds of taxes totaling $868,027.10 in 1944...
...They pay excise taxes...
...To the ordinary person it wouldn't seem to matter very much whether a reduction in price takes place when the article is sold or several months later...
...EIGHTY-FIVE businessmen who serve the flourishing agricultural community of Montevideo, Minn., revealed when interviewed recently, that the subject of taxation of cooperatives is a foreign and not a home-grown argument...
...Fortune's original study, book-length and thorough, was cut to a shadow of itself before publication...
...Mr...
...Their great economic value is in raising the standards of products bought and sold, in controlling prices to a certain extent, in preventing monopolistic ab».=°" " ON the specific points at issue, Fortune reported its three-fold conclusions...
...But th« most ardent cooperator does not see 'The Cooperative Commonwealth' around the corner...
...You cannot tax profits where there are no profits...
...A fundamental of the cooperative movement no matter how small or how large the cooperative, is self-help, and all forms of cooperation bring wide ownership of property...
...Describing the co-ops as "Big Business Without Profit," Fortune pointed out that four million members of 10,000 U. S. cooperatives did a 5 billion dollars worth of business in the fiscal year 1943-44...
...Even with funds reported by a major Wall Street investment firm to be so large that it is "the best financed campaign since Prohibition," the anti-cooperative organization has failed to line up its most natural allies in the field of business...
...Already it has driven the various kinds of cooperatives into closer cooperation than if they had been left alone...
...In fact, threatened with a tax on their patronage refunds, some cooperatives break out the counter-threat of a so-called active price policy, i.e., price cutting, so that there will be no savings and no refunds...
...TEN THOUSAND U. S. FARM COOPERATIVES DOING 5 BILLION DOLLARS WORTH OF BUSINESS LAST YEAR ROUSED COMPETING CORPORATIONS TO VIOLENT PROTEST"—a scare head which was not based on the content of the study but cooked up, apparently with a new lead sentence, to give the article "fight...
...The cooperatives insist that their patronage refunds are not profits—they are merely overpayments by their customers, which are returned to them on a basis proportionate to their purchases...
...On this Fortune says: "A tax on cooperative withholdings would hamper only the small growing cooperatives since the well-established ones would be able to borrow back from their members, or elsewhere, all the money they want...
...Fortune feels that this should be repealed...
...And said: "Why there should be a sudden and bitter attack upon cooperatives is a mystery to me, except that the inroads into the sacred precincts of retail distribution must be their unpardonable offense...
...It is built to serve patrons at cost rather than to serve the public at a profit...
...seems to be doing more to promote the cooperative movement in the public eye than it has ever been able to do for itself...
...Fortune pointed out the practical result of the attack against the co-ops...
...It disposed quickly of the argument that the cooperative "savings" are the same as ordinary corporation "profits" and should be subject to existing corporation taxes by saying: "Rebates on purchases constitute in effect a lowering of prices...
...Consumers Cooperative Associated in Amarillo, Tex., has just completed a survey of 130 local cooperatives which revealed that the annual tax bill was $i,950...
...Somewhere in the final days in the editorial office somebody wrote a "scare head" on the article...
...for a local co-op or a total of $173,450.90 for the-130 loeal co-ops...
Vol. 9 • August 1945 • No. 35
