The Control of " Trusts." mission were taken away, all incentive to do ing business would be killed, the affairs of corporations would be wound up, and the State would be compelled to face the condi tion of having ninety per cent'. of its factories closed, thousands of workingmen thrown out of employment, and its people made depend ent upon other States for the necessaries and the luxuries of life. That the percent age of profits allowed should be liberal no one will question. While four per cent, may be the average value of capital, we would suggest the allowance of six per cent. of ac tual net profits on the fair market value of the tangible assets of the corporation, as this percentage would be large enough to stimu late business and not so large as to work in justice between corporations and individual dealers. We do not mean the allowance of six per cent. only from the date of the en actment into law of this proposed plan, but an allowance of six per cent. profits on the actual tangible assets of the corporation for each and every year of its existence. Most coqoorations make no profits and de clare no dividends for some years after their incorporation. And to tax them when they are beginning to make money, without tak ing into consideration the years when the I One-tenth of first percenttim One-ninth of second " One-eighth of third " One-seventh of fourth " One-sixth of fifth " One-fifth of sixth One-fourth of seventh " One-third of eighth " One-half of ninth " Six-tenths of tenth " Seven-tenths of eleventh " Eight-tenths of twelfth " Nine-tenths every "
463
stockholders' money was earning nothing, when the stockholders were devoting their best thought and labor without any, or with small compensation, to make the privilege worth something, would be unfair, unjust and inequitable. A corporate charter is worth practically nothing, unless brains and money are expended to establish it on a pay ing basis in the business world. The value of a corporate charter represents the privi lege plus the brains and the money used to develop it. And the brains and the money expended should be taken into account, when a tax is levied on the profits earned by or through the privilege. After the State Board of Examiners has ascertained the percentage of actual net profits earned by a corporation for each and every year of its existence, based upon the fair value of its tangible assets for each year, it should allow a profit of six percent. for each and every year since its incorporation; and if the average of net profits earned during its corporate life does not exceed that amount, no tax should be levied. Only up on the excess of six per cent. of average net profits earned, should a tax be placed. Such a tax upon profits might be graded as fol lows :
of net profits above six per centum. " "
" " " " " " "
"
"
eighteen per centum.
It is reasonable to assume that corpora- I their profits, their incentive to overcharge dons will make all the profits they dare. And and increase their profits beyond a fair if we place a progressive graded tax upon I amount will be gone, and their time, thought
