Pierce Butler

“ When regard is had to the well-known and necessary practice of mutual insurance companies to collect in advance premiums in excess of total costs and to pay dividends out of the resulting surplus, it is clear that the company's construction is unreasonable. It would operate to defeat the plainly expressed purpose of Congress to impose a capital stock tax on mutual insurance companies.
2. The company contends that in any event subdivision (b) of section 1000 requires that item 37 be excluded from the amount used to measure the excise. ”

“ Section 243 of the 1921 act (42 Stat. 261) imposes a tax upon the net income of every insurance company for the calendar year 1921 and each taxable year thereafter. It declares that tax to be in lieu of other taxes imposed by that act, namely, income taxes on corporations generally, section 230, capital stock taxes, section 1000, and profits taxes, title 3. Section 1400 (a) repealed, to take effect January 1, 1922, title 10 of the 1918 act, which includes section 1000. ”

“ By means of an accepted mortality table and an assumed rate of interest, the company calculates the amount that would be required to be paid by the insured each year in advance to cover policy claims if deaths occur as indicated by the table and if that rate of interest is realized on the investments. The amount so ascertained is called the net or mathematical premium. There is added loading to cover expenses and unforeseen contingencies such as excess mortality, diminished taxes. ”