State and local taxation of banks
About: This article is published in Journal of Finance.The article was published on 1962-09-01. It has received 1 citations till now. The article focuses on the topics: International taxation.
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01 Jan 1979TL;DR: The Swartz study as mentioned in this paper showed that the finance group did not keep up with the general rise in state and local tax burdens upon corporations during the decade from 1962 to 1972, although the banking subdivision experienced a dramatic increase of nearly 50 percent.
Abstract: “‘luxable iiitume plus empieyee compensation plus interest. paid Lu i mi i v idea i a . sources: U.S., bepar tim.-nt ot Cuiriiurti-, iotiuiial Income ainl lio-.iuct A c c o u n t s , 1929-74, -f; tut i st i ca 1 Tables {Washinqton, D.C., n.d.) ; U.S., Department of C o m m e r c e , bureau c>f the Census, statistical Abstract: of the United b t a t e s , 1903 and 1073 (Washington, D.C.: OPO, 19C3 and 1973); U.S., Department of tue Treasury, Statistics of 1 ncomt-, I'.usiness Income 'lax R e t u r n s , l9b2 and 1972, C n p u i d t inn Income Tax Returns, 1962 and 1972, ami Individual Income Tax Returns, 1962 and 1972 (Washington, D.C.: GI’O, Various years). percent of taxable income" for 1962 in Table 5 summarizes the Swartz results. The update of the Swartz study for 1972 shows that the finance group did not keep up with the general rise in state and local tax "burdens" upon corporations during the decade, although the banking subdivision experienced a dramatic increase of nearly 50 per cent. Thus, it appears that the "temporary amendment" to Section 5219 resulted in the elimination of part of the discrepancy between bank taxes and taxes upon other corporations, even during a period in which the finance group as a whole increased its tax advantage rela tive to other corporations, both in absolute and relative terms. Even more important for savings and loan associations, the apparent tax advantage of the banking subdivision over agencies categorized as "other credit" (mainly savings and loans) was reduced by more than 50 percent during the decade from 1962 to 1972. Preliminary data for 197 3 support the conclusion that under the "temporary amendment" to section 5219, the states reduced the tax ad vantage of commercial banks over other firms. Unpublished data from the Internal Revenue Service show that taxes as a percentage of taxable income fell by 5 percent, to 35.7 percent, for all firms in 1973, even though the ratio for banks rose by 9 percent, to 20.8 percent. For credit agencies other than banks, the ratio rose by 17 percent, to 2 24.7 percent, in 1973. Because of data limitations and conceptual problems, Table 5 is more useful as a measure of relative standings among industries, rather than measuring absolute tax "burdens." The numerator, "taxes paid," includes some federal excise taxes and payroll taxes in addition to
6 citations
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Book•
01 Jan 1979TL;DR: The Swartz study as mentioned in this paper showed that the finance group did not keep up with the general rise in state and local tax burdens upon corporations during the decade from 1962 to 1972, although the banking subdivision experienced a dramatic increase of nearly 50 percent.
Abstract: “‘luxable iiitume plus empieyee compensation plus interest. paid Lu i mi i v idea i a . sources: U.S., bepar tim.-nt ot Cuiriiurti-, iotiuiial Income ainl lio-.iuct A c c o u n t s , 1929-74, -f; tut i st i ca 1 Tables {Washinqton, D.C., n.d.) ; U.S., Department of C o m m e r c e , bureau c>f the Census, statistical Abstract: of the United b t a t e s , 1903 and 1073 (Washington, D.C.: OPO, 19C3 and 1973); U.S., Department of tue Treasury, Statistics of 1 ncomt-, I'.usiness Income 'lax R e t u r n s , l9b2 and 1972, C n p u i d t inn Income Tax Returns, 1962 and 1972, ami Individual Income Tax Returns, 1962 and 1972 (Washington, D.C.: GI’O, Various years). percent of taxable income" for 1962 in Table 5 summarizes the Swartz results. The update of the Swartz study for 1972 shows that the finance group did not keep up with the general rise in state and local tax "burdens" upon corporations during the decade, although the banking subdivision experienced a dramatic increase of nearly 50 per cent. Thus, it appears that the "temporary amendment" to Section 5219 resulted in the elimination of part of the discrepancy between bank taxes and taxes upon other corporations, even during a period in which the finance group as a whole increased its tax advantage rela tive to other corporations, both in absolute and relative terms. Even more important for savings and loan associations, the apparent tax advantage of the banking subdivision over agencies categorized as "other credit" (mainly savings and loans) was reduced by more than 50 percent during the decade from 1962 to 1972. Preliminary data for 197 3 support the conclusion that under the "temporary amendment" to section 5219, the states reduced the tax ad vantage of commercial banks over other firms. Unpublished data from the Internal Revenue Service show that taxes as a percentage of taxable income fell by 5 percent, to 35.7 percent, for all firms in 1973, even though the ratio for banks rose by 9 percent, to 20.8 percent. For credit agencies other than banks, the ratio rose by 17 percent, to 2 24.7 percent, in 1973. Because of data limitations and conceptual problems, Table 5 is more useful as a measure of relative standings among industries, rather than measuring absolute tax "burdens." The numerator, "taxes paid," includes some federal excise taxes and payroll taxes in addition to
6 citations