October 11, 1917. 



1 he rlonsts Review 



17 



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HOW THE WAR TAXES AFFECT THE TRADE 



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WE ALL MUST PAY OUR SHARES. 



No Special Taxes for the Trade. 



The trade, including florists, nursery- 

 men and seedsmen, is not specially taxed 

 in the new war revenue law, which, 

 with President Wilson's signature, went 

 on the statute books last week, but the 

 character of the business makes some 

 of the new taxes bear quite heavily on 

 us. For instance, express charges will 

 bo increased approximately five per cent 

 under the paragraph which taxes the 

 express companies 1 cent on each 20 

 . cents paid to them. This tax will be 

 added to bills collected, instead of be- 

 ing paid by stamps affixed to receipt 

 books by the shipper, as was done the 

 last time express shipments were taxed; 

 consequently, the tax will be paid by 

 the buyers of cut flowers, plants and 

 , florists' supplies. This part of the law 

 goes into effect November 1. 



Growers will find freight bills in- 

 creased three per cent by the tax. This 

 will add nearly 7 cents per ton to the 

 cost of Pocahontas coal to grower-s in 

 the Chicago territory, many of whom 

 burn from 5,000 to 50,000 tons per year. 



Many Miscellaneous Items. 



Houses sending out travelers will find 

 their railroad fares increased eight per 

 cent and their Pullman fares increased 

 ten per cent. 



November 3 letter postage will be- 

 come 3 cents instead of 2 cents. 



The trade has escaped the threatened 

 tax on the mailing of catalogues, as 

 the law does not apply where the post- 

 age is less than 25 cents per piece; this 

 lets the seed trade out. 



The trade makes large use of tlie tele- 

 graph, in ordering stock and in F. T. I), 

 work. Each telegram or long-distance 

 telephone call costing 15 cents or more 

 will carry an added tax cost of 5 cents. 



New policies of insurance will carry 

 a stamp tax of one ])er cent of the face 

 and there are many other new taxes 

 that will be passed along to the con- 

 sumer but which do not ])ear specially 

 on our trade. One of these is three per 

 coiit on the cost of any new car wo buy. 



Excess Profits Hard Hit. 



Multitudinous as are the now taxes, 

 they are of small consequence when 

 compared with the two items of income 

 and excess profits taxes, especially tlib 

 latter. The excess i)rofits tax will take 

 from twenty to forty per cent of the 

 normal ]>rofits of many small corpora- 

 tions engaged in the iflorists' business 

 and tlio individuals will bo heavily as- 

 sessed Ijecauso they will have to pay in- 

 come taxes if not excess profits taxes. 



Growers who have anvwlioro from 

 $50,000 to $1,000,000 invested in land 

 and greenhouses will bo permitted to 

 earn from seven to nine per cent on the 

 capital before the war taxes apply, l)ut 

 the retail florist or commission dealer 

 using only $5,000 to $10,000 of capital 

 and turning it often to make the same 

 profit a fair-sized grower does, will be 

 harder hit. The war revenue bill often 



Application of the 



EXCESS PROFITS TAX 



To the Business of 



A Typical Retail Florist. 



This is the ease of a corporation 



employing $30,000, doing a business 



of $125,000 and earning net profits 



of $12,500 per year. 



Capital invested: 



Capital stock paid in $2.^,000.00 



Suplus and undivided protits 5,000.00 



Total $30,000.00 



Net income for year 12,500.00 



Exemption for corporation 3,000.00 



Deduction of 9% of capital 2,700.00 



Total exemption 5,700.00 



Excess profits subject to tax 0,800.00 



Excess protits tax: 



Profits over $5,700 and. not ex- 

 ceeding 15% of capital, none, 



20% Nothing 



Profits over $5,700 and not over 



20%, $300 at 25% $ 75.00 



Profits over 20% of capital and 



not over 25%, $1,500 at 35%. . 025.00 

 Profits over 25% of capital mid 



not over 33%, $2,400 at 45%.. 1,080.00 

 Profits over 33%, $2,600 at 00% 1.500.00 



Total excess profits tax $ 3,240.00 



Net income 12,500.00 



Deduct excess profits tax 3,240,00 



Amount subject to corporation 



income tax $ 9,200.00 



Corporation tax, G% 555.60 



Total U. S. Tax 3,795.00 



In the case of a partnership doing 

 the same business the excess profits 

 taxes would figure as follows: 



Exemption for partnership $0,000.00 



Deduction of 9% of capital 2.700.00 



Total exemption 8,700. 0<) 



Excess profits subject to tax 3.800.00 



Excess i)roHts tax: 



Profits over .$8,700 and not ex- 

 ceeding 157o of capital, none, 



20% Nothing 



Profits over $8,700 and not ex- 

 ceeding 20% of capital, none, 



25% Nothing 



Profits over .$8,700 aiul not ex- 

 ceeding 25% of capital, none, 



35% Notliing 



Profits over $8,700 and not ex- 

 ceeding 33';, of capital, $1,300 



at 4.->',;, $ 585.00 



Profits exceeding 33% of caiiital, 



$2,.")()0 at 00% 1,. 500.00 



Tot;il excess profits tax $ 2,085.00 



Total jtrofit to lie divided be- 

 tween two jiartners 10,415.00 



Ench parfner's share of profits.. 5,207.50 

 Iiiciiinc tMX of ciicli partner: 



$.-! 2O7.."i0'i7i2% $n4.1."> 



1.207..".0@2% 24.1.'. 



LO7.50r{il% 2.07 



Total for eacli $90.37 



Totnl for partiu-rship 2,085.00 



'J'otal for liotli partners 180.74 



Total taxes $ 2.205.74 



In the case of an individual the 

 excess profits taxes will be the same 

 as for a partnership, but the income 

 tax of the individual must be figured 

 on the full sum of the profits after 

 tho excess profits tax is deihietod, or 

 $1 0,415. 



has been referred to as the conscription 

 of wealth, but in its effects on the trade 

 it seems more like a tax on personal 

 ability, industry and special capacity 

 for the business. 



How the Tax Applies. 



In tlie accompanying boxed table the 

 ap])lieation of the law to a retail flo- 

 rists' business of moderate size is shown. 

 In one case the figures are for a cor- 



poration, in the second a partnership of 

 two men or for an individual. 



In the cases of the individual and the 

 partners the excess i:)rofits tax is in- 

 creased by the application of the indi- 

 vidual income tax, but in neither case 

 is any tax figured on income aside from 

 that derived from the profits of the 

 business. It is to be supposed that in 

 any case salaries for management have 

 been figured out in computing the profit 

 of $12,500. If the owner or chief stock- 

 holder also is manager he is entitled to 

 draw as salary a sum such as it would 

 be necessary to pay someone else to run 

 the business to an equally good finan- 

 cial result. 



The need for comprehensive book- 

 keeping is accentuated by the increased 

 taxes. We are expected to pay in ac- 

 cordance with the law and none of us 

 has a desire to do less than his duty, bitt 

 it is folly not to so keep books that tho 

 profits shown are of a tangible charac 

 ter rather than of the ephemeral quali 

 ties so many_profit accounts show to the 

 outsider who analyzes them after trouble 

 comes. 



ASTER YELLOWS. 



We are sending you under another 

 cover a specimen from our aster garden, 

 which contains about 500 plants, nearly 

 all of which are affected as the sample. 

 We would 'like to know what is the 

 cause of the disease and its remedy, if 

 there is any.' 



We planted the seeds in flats in the 

 greenhouse early in April, transplanting 

 the seedlings into 2-inch pots after the 

 second leaves appeared. About the 

 middle of May wo planted them in the 

 open, eight inches apart in rows about 

 two feet apart. 



The ground in which they are planted 

 has not been used for asters for about 

 four years and was fertilized last fall 

 and plowed under this spring. Other 

 plants from seeds sown in the .opeii 

 look better, but also show signs of thf 

 same disease. These are in soil that has 

 never before been used for asters. 



A. C. A.— Neb. 



Your plants are attacked by what is 

 commonly called the yellows disease in 

 asters, wliicli gives the entire plant a 

 bleached appearance. Its exact cause is 

 unknown, but it is probably due in con- 

 siderable measure to irregularity in tlir 

 supply of moisture to tlio roots, which 

 causes a dorangemont in the ])lant's 

 functions. The trouble. In common witli 

 stom-rot, may have its iiicoi)tion in the 

 seed bed. For this reason, outdooi 

 grown seedlings are always more iiL 

 mune from disease than tliose started 

 under glass. Overcrowding in seed flats 

 and burying seedlings too deeply at 

 transj)laiiting time will aggravate"^ the 

 evil. Cover the seed flats with sand 

 after sowing, prick off before tho plants 

 crowd, and grow them cool and airy. 

 Give frequent cultivation in tlie field, 

 especially during sjiells of hot, dry 

 weather, and you will materially reduce 

 the number of diseased plants, "c. W. 



