Word: ruml
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TIME April 30 reports that Beardsley Ruml suggests that corporations may avoid the excess-profits tax by having no excess profits, by allotting to the research department the equivalent of what would have been excess profits. There is a simpler way: the money might be donated to an educational institution, Dartmouth College, for example, of which Beardsley Ruml is a trustee. And there is a still simpler way. Let the officers vote themselves bonuses so as to wipe out what would have been excess profits...
...company that pays an excess-profits tax is shortsighted. So Tax Expert Beardsley Ruml told the Gas Appliance-Manufacturers Association in Chicago last week. It is management's duty, said Ruml, to use any profits that would be clipped by the tax to pay for research, development, increased advertising and anything else that may better a company's competitive position in the long...
...Ruml, who thinks that the tax is "an evil brew of inequity, exception, exemption and privilege," said that it creates two kinds of dollars. They are 1) "cheap earned dollars which, if not spent, will be taxed at high [excess-profits tax] rates"; and 2) "expensive dollars which are taxed at ordinary rates . . . The excess-profits tax is therefore not a burden, but a subsidy. It provides cheap dollars to the profitable and established company...
Beardsley Ruml thought differently. Back in Manhattan, he set about rounding up businessmen and raising money ($125,-ooo to date) for the battle, which begins this week when the House Ways & Means Committee reopens its hearings on the proposed tax. Last week Ruml announced that more than 100 top businessmen had joined in forming the Business Committee on Emergency Corporate Taxation, enlisted the help of such onetime New Dealers as ex-Housing Expediter Wilson Wyatt and ex-OPAdministrator Leon Henderson to marshal their case at the hearings...
RumFs group, which is not opposing higher taxes for business or anybody else, wants a simple emergency income tax on corporations substituted for the complex formulas and "base periods" of an excess profits tax. Says Ruml: "No excess profits tax ever has been devised that will not do more harm than good . . . It is inequitable and inflationary...