New Britain herald., 1917-08-06
SENATE RECEIVES
 WAR TAX MEASURE
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pC1 c tdApoySI lO llllpdlI Illo SeIpA|e~A and thus diminish government sources of taxation. It would be one of those disturbing taxes which would alarm business and check industrial produc- tivity. It is very poor economy and would hold out a threat of uncer- tainty'
 In recommending the graduated war prifits tax upon individuals as we'll as corporations in lieu of the present eight per cent. excess profits law, the committee said it's plan is similar to that of European countries, where 1t has had marked success.
 We must face the possibility, even the proba bility," the report stated, "of ever higher taxes than are now pro- posed in this country and we must adjust our system so that it will work satisfactorily even under increased rates. Your committee has not been able to find any satisfactory reason why individuals engaged in trade and business should not be subject to this tax (war prof1ts) as we'll as corpora tions and partnerships Under the present law the report stated in- Hated values to patents and trade marks and watering of corporations stocks makes evasion of the revenue law possible, while the committees new basis is believed to meet the situation. Senator Simmons also point ed out that the new plan is a war profits tax rather than an excess profits levy.
 The new tax of one cent for each 25 cents paid on parcel post packages was said in the report to remove dis elimination in favor of the railroads and the parcel post.
 addition to this the renOrt said, your committee can see no in- trinsic reason why, in this present emergency, the government should not impose tax upon this method of transportation, especially in view of the fact that the rates on first and second class mail are increased.' Saving People of Moderate Means.
 The house five pre- cent taxes upon electricity, gas and local telephone service were eliminated because "1t appeared to the committee that this tax would fall with very great severity upon the people of moderate means as we'll as the poorest classes, who at the present time depend very large ly in the cities upon gas or elec- tricity to furnish them with both light and heat for cooking as well as, in many cases, with power for running small machinery like that of the sewing machine. The committee felt that tax of this character ought not to be imposed unless a point was reached where 1t would become necessary to tax everything subcepti- ble to taxation. Light and heat are the very last things which should be subject to taxation For similar req sons the committee recommended that the tax upon charges for telephone fn C1l hc0 H@ AI
 Striking out of all insurance taxes from the house bill was based upon the belief that excise >taxes upon in- surance is a questionable principle and "should be subjected to tax only as a last resort
 Elimination or reduction of all of the five per cent gross sales tax upon many manufacturers was defended because the manufacturers also must pay high income and excess profits taxes. Your committee felt,'' the report said, that only where the con- ditions are exceptional should such g. manufacture gross sales tax be jus tifiable." For these reasons the house tax on patent medicines was reduced to two per cent.
 Tax on Motor Vehicles. Proposed new federal license tax on motorcycles and automobiles based upon the original selling cost in lieu of the house manufacturers tax was explained as follows:
 "A gross tax upon automobile man. ufacturers was first considered, but on thorough investigation it appeared that over so per cent were making very small profits. A few were mak- ing enormous profits. gross pro- duction tax in size sufficient to pro- duce substantial return would have driven out of business a large ma- jority of automobile manufacturers. Your committee concluded that the automobile was proper subject for war revenue tax and recommends for the high gross sales tax. which might or might not be passed on to the purchaser. a moderate excise tax upon the owners of automobiles and motorcycles"
 Declaring that the new tax on ca barets and retention of taxes on other amusement admissions Is justifable. the report said the tax on moving picture theaters charging less than 25 cents had been eliminated. be- cause:
 "The moving picture show has be- come a national institution. It pos sesses many valuable educational fea- tures They are largely patronized by people of small means
 House taxes on club dues were eliminated. the report said, because it was difficult to reach clubs proper ly taxable and at the same time ex- empt those which should not be taxed.
 Most house stamp taxes, virtually those of Spanish War days. the report said. have been retained The new one cent stamp tax on all bank checks. it is said, was provided because prevalent in most belligerent coun- tries and because there is no good