| Show Tax Exemption for Cooperatives Is Unfair To Private Business Threat to Democracy A house of r representatives pre small business business business busi busi- ness subcommittee is 18 s now engaged in a study of th the cooperative movement inthe inthe in inthe the Ui United ted States investigating charges that this movement nt is a threat to American American American Amer Amer- ican private enterprise and in fact to the whole American capitalistic profit system That 1 Investigation has been widely attacked by friends of f the cooperative movement as an attempt to smear and destroy co cooperatives No Nothing hing could b be further fr from m t the e truth American businessmen men who look with concern at t the growth of co cooperatives p a tives fives in country have no quarrel with the basic theory and pra practice tice of cooperation in marketing purchasing manufacturing or distribution Their Their only quarrel is with the tax exemption advantages advantages ad ad- vantages which have been given to the c cooperatives operatives by an n overgenerous gov gov- t eminent Those who believe In the private enterprise enterprise enterprise en en- system feel c confident they can compete with cooperatives if the race Is f fair r. r But they contend conten i it is unreasonable unreason unreason- unreasonable unreasonable able and unjust to saddle the private enterprise horse with a heavy tax burden while permitting the cooperative horse to bear no tax burden at all or a very small tax burden Cooperation has grown to th a a year business business' in lii America they charge primarily because b caus the co ops have ave largely been relieved of the burden of income taxation They have used the profits which private businesses would have had to pay in taxes to gobble up the factories and busin businesses of less Jess fortunate for for- competitors and pay for them out of earnings that the former owners had to give in large part to the U. U S S. S treasury The result resul h has been een an amazing expansion ex cx- in cooperative enterprise in this country in recent y years ars They have branched out from the original fannI farm fann I market marketing g cooperatives until today they are in almost every line of business They not o only market farm products but pack them can them dehydrate them and process them in various ways waya They wholesale and retail most of the commodities com corn used on the he farm and in the a farm home home ma machinery home machinery 1 f fertilizer feed electrical appliances food etc They manufacture and distribute a great many items which have no relation to farm operation such as cigarettes cigarette lipstick face powder r toothbrushes vitamin in pills plUs matches etc tc They are engaged in drillIng drilling drill drill- ing ng oil wells and refining and distributIng distributing ing pet petroleum leum products They hey own and o operate e a l lumber b r and shingle mills They ey I operate banks and insurance companies make paper and build homes They run run fractor tractor and cultivator pants plants fertilizer plants grain grai l elevators fe feed 1 mills paint fa factories t ries and cosmetic and chemical plants Most of this trem tremendous expansion has come out out of the profits of cooperative cooperative tive five operation profits operation profits which are in jn large measure available b because cause the ops co-ops pay little or no income taxes Take for instance the case of on one of today's multimillion multi- multi I m million dollar cooperatives the Grain Terminal association It started some ago ago with a Borrowed Ved capital of Today its net worth is more than and in 1946 it made pro profits its of 36 O OO COut of its tax-free tax profits profi l it has bought out many private businesses businesses and and taken them off the tax rolls Therein lies the great danger of tax exemption for cooperatives It gives them such su h an advantage over private priva capitalistic capitalistic capital capital- business that cooperatives may eventually swallow up all private te busi bust ness And then what Then we have socialism achieved by a back door route route by reason of tax exemption subsidization tion granted by our American democratic democratic democratic demo demo- cratic capi capitalistic system Private business busi bust ness with its taxes t will have in effect paid the bill for the shift to socialism socialism- thus being compelled to destroy itself If you think this is fantastic read read what Willis J X B Ballinger former economic economic economic eco eco- a adviser to the federal trade commission commission com corn mission says about the danger of taX tax inequality as between private business and the cooperatives Should the cooperative cooperative cooperative co co- co- co operative movement triumph he writes all business would be collectively owned d dby by the The result of cooperation cooperation cooperation co co- co- co operation if it succeeds will be to destroy destroy destroy de de- de- de stroy capital capitalism m and with i it democracy |
