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\ Living In The County -•-A Balance Sheet A young man who is planning to build a house in Laurens County asked a very disturbing question last week at a public meeting of the county’s legislative delegation. Charles Johnson of Clinton asked, “What advantages do we receive for our county tax money by living in the county (rural area)?” He was referring primarily to the fact that a court order has stopped use of county crews and equipment in industrial developments, subdivisions, civic or church projects. Of course, this also includes work on private driveways and road entrances. The county traditionally has done work on these projects. A judge has ruled that the county can’t do this sort of work. There is a constitutional question involved and we can see that. We can also see that a lot of work is going to go undone—projects which would help the county’s development but which individuals can’t do for themsel ’es. SO—back to Johnson’s question— what do rural citizens now get for their tax dollar? Well, there’s the protection of the courts and there’s the protection of the sheriff’s office. The county agent’s office will help with any advice Mr. Johnson might need about growing anything, vegetable or animal, around his planned new house. The deeds and other papers used in the transfer of the property involved are on file in the county courthouse. There are other county services but many of them don’t touch the ev eryday lives of county residents. For the record, county tax money, in va rying proportions, also goes into the following: Mental Health Clinic, Res cue Squad, National Guard ; forestry ; coroner: county physician; Laurens County Library ; County Service Of ficer; public welfare; Breeders’ Asso ciation; Farm Bureau; County Health Dept.; tax collector’s office. Tax As sessment Office; County Auditor’s Office; Clerk of Court’s office. ^Mr. Johnson may or may not get mflch'tise out of these offices but w’e’ll put them down on the plus side. ON the minus side . . . He will not get fire protection. In fact he’ll have to pay premium in surance rates. He will not get gar bage pick-up service. Conversely, he stands the risk of some folks dumping trash along the roadside near his house because there are no county-sponsored rural garbage dumps. He will not get water service because there is no county-wide water system. He can ask the Health Department to approve his septic tank but they wdll not conduct a prelocation test prior to installation to determine where the tank should go. Spokesmen for the department say they don’t have the staff to conduct such tests for all the septic tanks which are being in stalled in this county. The legislative delegation is fight ing the court order concerning use of county equipment and work crews. The delegation also has studies under way on rural fire protection, county wide water system and locations for county-approved rural garbage dumps. Also in the delegation’s behalf it should be pointed out that of the coun ty’s current $901,000 budget, only $203,000 comes from the 14-mill coun ty tax used for county purposes. The other almost $700,000 comes from the state—the county’s share of income- taxes, liquor taxes, gasoline taxes, etc. In the past six years, county taxes have been reduced seven mills as some road bonds w’ere paid off. THE POINT is this: Like Mr. Johnson, many county residents are now putting their couqty taxes and their county services on a balance sheet. Many don’t like the way it adds up. Previously, the use of county crews often served to soothe disgruntled taxpayers. If the current situation continues, taxpayers will be looking to the coun ty for more progressive performance in other areas. And that might be one of the blessings to come out of it all. FAMILY BUSINESSES The day of the family business is in the sunset stage, it appears. Over the past few years literally thousands of established and successful family business enterprise have been sold to conglomerates—giant corporate com bines which pick the choice fruit of the business world when the family is confronted by Uncle Sam. Actually, it is the confiscatory taxation imposed by the Federal Gov ernment which is forcing the success ful family business out of existence. And there is scarcely a community in the country which has not suffered from this problem. The successful family business builds on its com munity reputation as well as its ser vice to the commercial community. More often than not a major consid eration is the goodwill established by the founding family’s integrity and fair treatment of customers as well as employees. Unhappily, Uncle Sam, who has never been able in modern times to manage his own affairs without buck ets of red ink beside his desk, isn’t a very good judge of busineses. He never seems to take into account what the founding head of the family busi ness meant to it. The tax appraisal is made without lowering the value when the boss is gone. Accordingly, successful business men who have nursed a family enter prise to profit and fame have had to escape the harsh treatment of heirs by selling the family business. A conglomerate gives the family businessman stock. The stock is priced in the paper 5 days a week. The gov ernment can’t appraise beyond the quoted price. The family sells enough stock to satisfy Washington. And a part of the community dies. The Listener Review 01 The Paper Industry BY BABSON’S REPORTS tNC. WELLESLEY HILLS, MASS.- Manufacturers of paper and pulp showed an improved perform ance last year over the depressed re sults of 1967. Total production of paper and paperboard for 1968 was 49,200,000 tons, a very heal thy 7% gain over the 46,000,000 tons produced in 1967. While pro fits for the industry were ad versely affected by higher taxes and increased costs, many paper companies showed improved earnings last year. Few, how ever, equaled their 1966 highs. dustry by buying Davol, Inc., a maker of hospital and consumer health products. International Paper has also obtained a li cense from a German paper con cern to make and market paper cloth throughout the Western Hemisphere. Benefits from these and other moves should eventu ally result in improved earnings. KIMBERLY-CLARK A strong position in the con sumer products area, new pro duct introductions, increased efficiencies, and expanding for eign operations point toward higher sales and earnings in the years ahead. Company is chang ing from fiscal-year tocalendar- year reporting. SCOTT PAPER Strong demand for company’s domestic sanitary paper products should push 1969 sales well above 1968’s record level. Longer-term prospects are enhanced by broad ened earnings base, new pro ducts, and greater earnings con tributions from foreign affiliates. LOOKING AHEAD The outlook for paper and pulp production in 1969 is clouded somewhat by the possibility of an economic slowdown, and it is likely that profits will remain un der pressure from higher costs and lingering overcapacity prob lems in certain lines. Neverthe less, prospects for the industry over the next few years appear brighter now than they have been for some time. One of the big problems the industry has had has been the tendency to build too many plants. If one company built a new paper mill in a new area, competition was sure to follow with two more! The ventual result was excess ca pacity, price weakness, and de clining profit margins. Lately, however, there have been indica tions that the industry managers . are going to follow a more en lightened approach to profits. Also, assuming a reasonably strong economy, there should be a much better supply-demand re lationship for paper in the future than has been the case in the past. While demand will be growing, projected capacity increases for the next three years will decline to 3,900,000 tons. This is down from an 8,500,000-ton rise for the preceding three-year period, 1966-1968. BROADENING THE PROFITS BASE Paper company managers are also attempting to reverse the de dining return on invested capital by diversifying into the more pro fitable areas of the business, e.g., disposables and non woven mater ials, and more effectively utiliz ing their substantial acreage, e.g., real estate development and mineral exploration. Though it will be some time before these efforts pay off, they do indicate a more aggressive approach to profits. The Babson staff feels, in view of the industry’s imporv- ing prospects, that paper stocks should be held, and periods of price weakness could be used for selected purchases. Below are brief comments on some of the leading paper companies. CROWN ZELLERBACH This second-largest paper corporation is a highly integrat ed producer with industrial and business papers, paperboard, and newsprint as the major groups. Future prospects are enhanced by recent joint venture In Holland for the manufacture of flexible packaging materials. Operations are expected to begin by mid year. INTERNATIONAL PAPER This world’s largest paper manufacturer last year made a major move into the health in- Jjttmiolk The Editor. I wish to express appreciation to you and the sponsors of the new weekly feature, “Come to Church*, which lists the names and addresses of the various churches in the Clinton area, a- long with the name of the re spective pastor. This, I feel, is one of the many good and appreciated com munity services rendered by The Chronicle having to do with church and community activities. I wish to commend you also for not printing liquor adver tisements in your paper. Many, I am sure, join me in these ex pressions. Yours truly, M. Floyd Hellams Pastor Saving And Investing BY RICHARD GANTT Attorney Presbyterian College Everyone of us wants to in vest in something that will bring economic growth and security. However, it is not wise to spe culate in some investments un less you have taken care of other financial needs. First the family must have an adequate amount of life insur ance. This enables us to protect our families during the period of economic growth when most of our earnings go toward the raising of a family. A usual estimate of how much to spend is from 3% - 5% of gross income. A secondary priority would be home ownership. More than half of Americans are buying their own homes. The great majority of these have mortgages. A per son should pay a down payment of at least 10% on his house to keep his monthly payments lower. Ex perts suggest that until substan tial equity is reached perhaps 50% of the home owned; you should avoid a large investment pro gram. What we owe on installment debt should be modest in rela tion to our incomes. Regardless of the rate of interest you pay the effective rate is in excess of 10%. Earning this amount in in vestments regular ily is difficult. Therefore, it would be a good business solution to reduce your installment debt completely be fore investing in the stock mar ket. Installment debt should never exceed 1/3 of discretionary in come, which Is income remaining after all the living expenses have been met Also installment debt should not exceed 10% of month ly net income. An ample checking account should be established before starting a heavy investment pro gram. It is estimated that you should keep one month’s salary of earnings as a minimum. Every family needs a savings fund that can serve the func tion of p.-oviding an emergency fund for sickness or financial problems that develop beyond our capacity to pay out of current in come. This fund should not be used for investments. Beyond these basic require ments any excess cash you have can be working and growing for you. You can invest the cash in a savings account at your local bank, at the Savings and Loan Association. Under both of these savings plans your investment is insured up to certain limits. U. S. Savings Bonds provide an easy way of saving. The bond a-month plan at your employer enables you to save before you spend. Series E Bonds are part of the nonmarketable debt of the U. S. Government. They took the place of Postal Savings Bonds. $18.75 purchases a bond in the amount of $25. $37.50 purchases a $50 bond; $75 purchases a $100 bond. Additional amounts may be purchased. The longer the bonds are held, the greater their value. The bonds are redeemable sixty days from date of purchase. Once the initial waiting period has passed, the bonds may be pre sented for payment. The Series H Bond pays the owner interest by check rather than accumulating interest as the Series E Bond. The yield is the same as the Series E. Minimum investment is$500.SeriesE Bond series offers a greater degree of liquidity than the Series H. Bond. The final step in investing after all the other family needs are met is the purchases of invest ment securities including stocks and bonds. A regular month ly plan of investment in a par ticular security is a good way to start. The monthly payment can be invested in a special security or in an investment company. Investment company or mutual fend invests in many companies 2-B—THE CHRONICLE, Clinton, S. C., March 6, 1969 Questions, Answers About Income Tax (This column of questions and answers on federal tax matters is provided by the local office of the U.S. Internal Revenue Ser vice and is published as a public service to taxpayers. The column answers questions most fre quently asked by taxpayers.) Q. Can I use 1968 income and expense figures to make a de claration of estimated tax for 1969? A. Yes, this is one method that can be used. Should there be a change in these figures during the year then an adjustment can be made at the time an install ment is paid. One change that has to be made when last year’s figures are used concerns the surcharge. The rate for the surcharge was 7.5 per cent for 1968 but since the sur charge is due to end June 30, the rate that should be used for 1969 declarations is 5 percent. If you received a preaddressed package of estimated tax forms in the mail be sure to use them when you file. It will help assure proper crediting of your pay ments. Q. When you itemize medical deductions, do you add all of your medical insurance pre miums to your other medical expenses? A. No. One-half of the pre miums paid for medical in surance up to a maximum of $150 is deductible without regard to the 3 percent limitation on medical expenses. The balance is added to your other medical expenses. This means you may be able to deduct as much as $150 even though your other medical expenses were not great enough last year to qualify for a de duction. Q. Do you have to pay self- employment tax on income from a part-time business if Social Se curity tax has been taken out of your regular wages? A. If Social Security taxes have been withheld on $7,800 of wages, then you will not have to pay self-employment tax on your in come. If Social Security taxes were withheld on wages less than $7,800 then you may be liable for self-employment tax. The maximum income on which Social Security and/or self-em ployment tax has to be paid is $7,800. For additional informa tion send a post card to your District office requesting a free copy of IRS Publication 533, In formation on Self-Employment Tax. Q. I have several W-2 forms. Should I send them all in with my return or can I just add them up and give you the totals? A. All Forms W-2 received should accompany the tax return. Missing W-2 Forms were a major reason for delays in processing returns and refunds last year. Q. My ex-husband gives me $175 a month for myself and two children. Is this taxable to me? A. If the money is designated in your divorce or separation a- greement as child sjipport pay ments then it will not be tax able. However, alimony or separ ate maintenance payments are taxable and must be reported on your return. Q. What form do I need to report capital gains? A. Use Schedule D, Form 1040, to report gains and losses from the sale or exchange of property. A copy may be obtained from your local IRS office as well as from many banks and post offices. Q. I have a company expense account. Do I report this on my return? A. This should be noted by checking the box at the bottom of Page 2 of Form 1040. If you account to your employer for these expenses and your reim bursement matches these ex penses, then there is nothing fur ther to report. However, if your reimburse ment exceeds your expenses, then the excess should be reported as income. If your expenses were greater than your reimbursement then you report the reimburse ment and deduct the expenses. Q. Working part-time, my wife earned several thousand dol lars last year. Should we file joint or separate returns? A. Generally, joint returns are more advantageous for married couples. Compute your tax both ways and then file the way that results in the lower tax. Situa tions that could produce a lower combined tax on separate returns are when both harvrhfedltal ex penses or net capital losses. TAXPAYERS, HOW LONG? THE FAMILY TAX BURDEN The estimate of all taxes to be collected in fiscal 1969 by federal, state and local governments aver ages out to about $3,927 per American family. That s up $370 from fiscal 1968, says the Tax Foundation, Inc. Thirteen years ago, taxes collected by all government were equivalent to $1,897 per family. This estimate is based on anticipated tax receipts of $247 billion in fiscal 1969 and will be $147 billion higher than fiscal 1956. Tax receipts by the federal government alone will have more than doubled since 1956, while state-local tax receipts will be close to tripling during the same period of time. This ever-increasing tax burden on the American taxpayer points up the immediate need for careful screening of expenditures, elimination of overlap ping projects, and the setting of priorities at all levels of government. and you trs paying for trained management. You can join or start an in vestment club. These clubs usu ally have op to 20 members and they pool their monthly Invest ment and purchase stocks. The advantage here la the members learn about investment and the purchase of shares in quantity saves brokerage costs. If you fol io* these steps your investment plans will be in line with your basic financial needs. par orrv