SUBJECT: FACILITIES AND SERVICES-CLUB DUES SOCIAL, ATHLETIC SPORTING CLUBS WITNESS: CLEM YOUNG, PRESIDENT, CLUB MANAGERS ASSOCIATION OF AMERICA. SUMMARY OF STATEMENT OUTLINE 1. Identification: (a) Personal. (b) Organization represented. 2. Size of industry: (a) Number and type of clubs, members, employees. (b) Dollar volume and type of revenues, payroll, taxload. 3. Need for tax reduction: (a) Effect on employment and economy. (b) Average member income level. 4. Recommendation: Reduction of excise tax on dues and fees. SUMMARY The Club Managers Association is an organization of 2,300 professional managers of America's bona fide private clubs, well acquainted with industry's problems. This is a $2.1 billion business affecting over 9 million and paying total taxes in excess of $300 million. Clubs are definitely not the "home of the idle rich" but serve the ever-broadening middle class ($10,000 to $15,000 income bracket). A reduction in excises on club dues and fees would provide $15 million in wages and add another $20 million in purchases to the economy. CMAA again recommends the reduction from 20 to 10 percent in Federal excise taxes on dues and fees. SUBJECT: FACILITIES AND SERVICES-CLUB DUES GOLF CLUBS WITNESS: C. W. BENEDICT, PRESIDENT, UNITED STATES GOLF ASSOCIATION. SUMMARY OF STATEMENT The 20-percent excise tax on club dues and initiation fees unreasonably discriminates against golf membership and should be reduced to 10 percent. (1) The 20-percent rate amounts to a penalty on golf membership: Only horse and dog racing attendance is also taxed at the 20-percent 1365 rate. The cabaret tax on night club patronage (of far less public benefit than recreational club membership) was reduced to 10 percenti in 1960. (2) Golf club membership is not limited to wealthy persons: Of about 6 million golfers who played over 15 rounds in 1963, more than 53 percent played at the nearly 5,880 regulation private and semipublic courses in the United States. More than half the private clubs are small 9-hole courses located in communities of less than 10,000. Ninety percent of private clubs have annual dues of less than $500 per family membership. (3) Private golf clubs contribute to the general welfare (a) By promoting physical fitness (golf is one of few outdoor sports healthful for persons of all ages); (b) By supplementing, at private expense, public golf facilities, which are extremely overcrowded and inordinately expensive to expand (private clubs also pay local property taxes and thus contribute doubly to local government); and (c) By employing many unskilled and youthful workers in a healthful environment (thus helping relieve unemployment among two seriously underemployed segments of our population). (4) Private golf clubs are experiencing financial difficulties: Since 1931 the number of private clubs has dropped 20 percent, much of which is a recent result of a cost squeeze. The 20-percent dues tax is a significant adverse factor in the growth of private clubs, as indicated by the quadrupling during the same period of semipublic clubs which involve less taxable dues. In view of the social contributions of private clubs, Congress should encourage rather than discourage them as is being done by the present discriminatory 20-percent tax. SUBJECT: FACILITIES AND SERVICES-CLUB DUES WITNESS: MYRA K. WOLFGANG, VICE PRESIDENT, THIRD DISTRICT, HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Would like a reduction in the Federal excise tax on private club dues, locker and moorage fees. Feel it especially unfair that clubs which make contributions to Government-approved employee pension plans should have to pay 20 percent on dues income and assessments used by the club to support employee pension plan. SUBJECT: FACILITIES AND SERVICES CLUB DUES WITNESS: FRANK G. HATHAWAY, SECRETARY-TREASURER, NATIONAL CLUB ASSOCIATION. SUMMARY OF STATEMENT I. Introduction of role of National Club Association. Who is represented. II. Excise tax history (for foundation). 1. Intent. 2. Interpretation. B. Reduction of excise taxes on substitute and competitive facilities. C. Our request for reduction or elimination. 1. Dues and initiation fees to 10 percent. (b) Slip rentals. (c) Others. 3. Funds to retirement plans. III. Compendium (body of testimony). A. Selected statements from compendium on tax theory wherein we establish a cause-and-effect relation as applied to clubs. B. Alternative facilities and tax consequence. 1. Clandestine clubs. 2. Fraternals. 3. Private-nonclub facilities. (a) Home. (b) Executive dining rooms. (c) Governmental facilities. IV. Decisions by policymakers and planners-boards of directors for the future (strength and condition of industry to be covered by others). A. Investment. 1. New construction. 2. Reconstruction. B. Employment (brief-to be covered by others). V. Conclusions. 2. Retirement and government load. A. Tax generating ability of clubs. C. Social and national purposes fulfilled. WITNESS: WARREN SUBJECT: FACILITIES AND SERVICES CANTRELL, PRESIDENT, PROFES SIONAL GOLFERS' ASSOCIATION OF AMERICA. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (1) Golf's position in the economic and social structure of the Nation and its growth as a recreational and therapeutic agent for male and female, the old and the young, the sick and the well. (2) The part which the PGA and its members have played in the development of these concepts and in the consequent growth of the game. (3) The interest of the PGA in increasing the number of clubs and courses and consequent employment opportunities for its members, as well as the enhancement of the welfare of the Nation and its citizens, through the promotion of these concepts. (4) The effects of the present excise taxes on club dues and admissions and on golf equipment in deterring the achievement of the full potential of expansion in the number of golf clubs, the growth of the game and the employment opportunities for golf professionals which have been made possible by the development of these concepts. SUBJECT: FACILITIES AND SERVICES WITNESS: ROBERT C. JOHANNESEN, PAST PRESIDENT, NATIONAL ASSOCIATION OF CLUB ATHLETIC DIRECTORS. SUMMARY OF STATEMENT SUBMITTED FOR RECORD My testimony will show the importance of physical fitness in the Nation as it is influenced by athletic clubs. The points I will elaborate on are (1) The physical well-being of our business leaders in the community, State, and Nation. (2) The year-round athletic and social programs and facilities for men, women, and children. (3) The athletic clubs' leadership in community, State, and National athletic and recreational programs. (4) Cost of maintaining a broad athletic program for members and community. Finally, I will speak on the effect of the 20-percent excise tax on club fees, dues, and locker rentals; on the ability of the clubs to continue and enlarge their programs in this field. SUBJECT: FACILITIES AND SERVICES- WITNESS: DR. GENE C. NUTTER, EXECUTIVE DIRECTOR, GOLF COURSE SUPERINTENDENTS ASSOCIATION OF AMERICA. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD RECREATION-A SOCIAL NECESSITY The world around us is being changed so fast by automation and the technological revolution that people cannot adapt to the mental and emotional pressures without changing their mode of living. The concept of "all work and no play" must be replaced by a new understanding that work hours must be balanced with hours of healthful recreation and leisurely activities. Recreation is also the best salvation for the dilemma of the shorter workweek, the early and prolonged retirement, and the juvenile with free time. GOLF A LEADING RECREATION ACTIVITY Golf is one of the most popular recreation outlets today. Last year over 6 million Americans played 15 or more rounds on some 7,000 golf courses. Another million played less than 15 rounds and 750,000 took up the game. No longer only a game for the wealthy, golf continues to boom and will invade all levels of income-if adequate golf course facilities can be provided. GOLF COURSE MAINTENANCE COSTS RISING But, golf course maintenance costs are rising rapidly because new equipment, techniques, and supplies must be provided in order for the grass to survive under conditions of heavier traffic and play. Golf clubs must find funds to meet the rising costs, yet they are limited in how much they can increase dues because the average income of golf club members today is much less than when the game was considered a luxury. UNFAIR EXCISE TAXES DEPRESS DEVELOPMENT OF ADEQUATE GOLF COURSE FACILITIES One quick way to relieve the growing financial pressure on golf recreational facilities is to reduce the Federal excise tax on club membership dues. The wartime tax still remains as an unfair discrimination against golf course facilities. This tax has already been eliminated, for example, from cabarets and racetracks, activities which do not contribute as wholesomely to recreation and sports as golf does. The elimination of even the wartime tax on golf membership dues would free golf club funds which would substantially increase the maintenance and development of golf course facilities. More labor could be hired, more money spent for vital supplies and equipment, and the sorely needed expansion in golf course facilities could be undertaken more rapidly. The amount of tax revenues thus lost by 34-720-64-pt. 69 |