Die konsumgenossenschaftliche Gütervermittlung, ihre Technik und wirtschaftliche Bedeutung

Grundzüge der Sozialpolitik

Bibliographic data

Monograph

Identifikator:: 1020603151

URN:: urn:nbn:de:zbw-retromon-62754

Document type:: Monograph

Author:: Strutz, Georg http://d-nb.info/gnd/117677558

Title:: Die Absetzungen für Abnutzung nach dem Einkommensteuergesetz

Edition:: Zweite durchgesehene und ergänzte Auflage

Place of publication:: Berlin

Publisher:: Industrieverlag Spaeth & Linde, Fachbuchhandlung für Steuerliteratur

Year of publication:: 1924

Scope:: 1 Online-Ressource (65 Seiten)

Collection:: Economics Books

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34. STOCK DIVIDENDS be equivalents; and that the financial results to the corporation and to the stockholders of the two methods are substantially the same—unless a difference results from the application of the Federal income tax law. Mrs. Macomber, a citizen and resident of New York, was, in the year 1916, a stockholder in the Standard Oil Co. (of California), a corporation organized under the laws of California and having its principal place of business in that State. During that year she received from the company a stock dividend rep- resenting profits earned since March 1, 1913. The dividend was paid by direct issue of the stoek to her according to the simple method described above, pur- sued also by the Indiana and Nebraska companies. In 1917 she was taxed under the Federal law on the stock dividend so received at its par value of $100 a share as income received during the year 1916. Such a stock dividend is income as distinguished from capital both under the law of New York and under the law of California; because in both States every dividend representing profits is deemed to be income whether paid in cash or in stock. It had been so held in New York, where the question arose as between life-tenant and remainderman, Lowry ». Farmers’ Loan & Trust Co., 172 N. Y., 137; Matter of Osborne, 209 N. Y., 450; and also, where the question arose in matters of taxation. People ». Glynn (130 App. Div. 332; 198 N. Y., 605). It has been so held in California, where the question appears to have arisen only in controversies between life tenant and remainderman. Estate of Duffill (58 Cal. Dec. 97; 180 Calif., 748). It is conceded that if the stock dividend paid to Mrs. Macomber had been made by the more complicated method pursued by the Standard Oil Co. of Kentucky—that is, issuing rights to take new stock pro rata and paying to each stockholder simultaneously a dividend in cash sufficient in amount to enable him to pay for this pro rata of new stock to be purchased—the dividend so paid to him would have been taxable as income, whether he retained the cash or whether he returned it to the corporation in payment for his pro rata of new stock. But it is contended that, because the simple method was adopted of having the new stock issued direct to the stockholders as paid-up stock, the new stock is not to be deemed income, whether she retained it or converted it into cash by sale. If such a different result can flow merely from the difference in the method pursued, it must be because Congress is without power to tax as income of the stockholder either the stock received under the latter method or the proceeds of its sale; for Congress has, by the provisions in the revenue act of 1916, expressly declared its purpose to make stock dividends, by whichever method paid, taxable as income. The sixteenth amendment proclaimed February 25, 1913, declares: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” The revenue act of September 8, 1916, c. 463, 39 Stat. 756, 757, provided: “That the term ‘dividends’ as used in this title shall be held to mean any distribu- tion made or ordered 10 be made by a corporation, '* * * out of its earnings or profits acerued since March first, nineteen hundred and thirteen, and payable to its shareholders, whether in cash or in stock of the corporation * * * which stock dividend shall be considered income, to the amount of its cash value.” Hitherto powers conferred upon Congress by the Constitution have been liber- ally construed, and have been held to extend to every means appropriate to attain the end sought. In determining the scope of the power the substance of the transaction, not its form, has been regarded. (Martin ». Hunter, 1 Wheat. 304, 326; McCulloch ». Maryland, 4 Wheat. 316, 407, 415; Brown o. Maryland, 12 Wheat. 419, 446; Craig v. Missouri, 4 Pet. 410, 433; Jarrolt ». Moberly 103 U. S. 580, 585, 587; Legal Tender Case, 110 U. 8. 421, 444; Burrow-Giles Lithographic Co. ». Sarony, 111 U. S. 53, 58; United States ». Realty Co., 163 U. 8S. 427, 440, 441, 442; South Carolina ». United States, 199 U. S. 437, 448-9.) Is there anything in the phraseology of the sixteenth amendment or in the nature of corporate dividends which should lead to a departure from these rules of con- struction and compel this court to hold that Congress is powerless to prevent a result so extraordinary as that here contended for by the stockholder? First. The term “income” when applied to the investment of the stockholder in a corporation, had, before the adoption of the sixteenth amendment, been commonly understood to mean the returns from time to time received by the stockholder from gains or earnings of the corporation. A dividend received by a stockholder from a corporation may be either in distribution of capital assets or in distribution of profits. Whether it is the one or the other is in no way affected by the medium in which it is paid nor by the method or means through

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