The Washington times., 1917-01-24
Democratic Measure Levys Tax
on Excess Profits" and In
creaseS Inheritance Tax.
CAUCUS WILL ACT SOON
Bill Was Drafted BY Congress-
men Kitchin, Rainey, and
Hull As Subcommittee.

The Democratic revenue bill, levy
ing a tax on "excess profits" and in
creasing the existing tax on inherit
ances, was practically completed to-
day by Democratic members of the
House Committee on Ways and Means.
A party caucus to approve the meas
ure is scheduled for tomorrow or Fri
day night.
The fundamentals of the bill were
decided upon several days ago by the
majority members of the committee,
but drafting OF the emergency meas
ure was left to a subcommittee con-
sisting of Chairman Kitchin and Con-
gressmen Rainey and Hull. This
subcommittee has worked out bill
in accordance with Administration
plans to, raise additional revenue
through the two items mentioned.
Method of Collection.
1t is proposed that the excess
profits shall be collected in the same
manner the Government now collects
the income tax. There must be re-
turns, under oath, from every CO.
partnership and corporation, and If
the internal revenue officers doubt
completeness of such returns they are
given inquisitorial powers to go into
the taxpayers records to show the
error of or substantiate his returns
1t was said today that no new ma
chinery will be provided for the ex-
cess profits tax: that is, no new
bureau in the Treasury is contem-
plated.
May Mean Additional Help.
The Internal Revenue Bureau, with
the addition of a Few. experts on tax
gathering, is regarded as being able
to cope with the details of the new
tax and the taking in of the shekels
Hereunder.
The impending Treasury deficit will
call for additional revenue of about
$3.50. 900. 900 during the next fiscal
year This amount, II is estimated,
can be raised by a revenue bill cover
ing two items, instead of one which
revises the tariff or taxes many items.
To Increase Inheritance Tax.
Democratic members of the committee
will submit to the caucus a proposal 10
raise the existing tax on inheritances
SO per cent and to levy a new tax Of
per cent on all excess profits"
This latter tax will be directed at
Hopartnerships and corporations. "EN-
cess profits" are to be construed as all
profits above an per cent return on
capital stock plus a fiat $1,000 eXemIS
ton. This fiat exemption of 5000 will
be allowed in all cases before the per
cent tax becomes operative.
1t is said by Democratic members Of
the committee that plans to modify the
Hnn 80 fnly NTH
tariff duties. have long since been aban-
doned and the revenue bill. as forecast.
will relate only to inheritances and
excess profits.
Estimates of Yield.
Chairman kitchin's revised figures are
that the tax. on profits will yield S220.-
100000 in revenue each year. The higher
rates on inheritances are expected to
yield $780, 900 additional.
TT is estimated" said Mr.. Kitchin,
that during the next fiscal year we
must have approximately 1926. 200. 900
additional revenue. The proposed
tax on excess profits" and the inheri-
lance tax will yield this sum, accord
ing to our figures. The perfected bill
probably will be presented to the
caucus Thursday night"
1t is understood Republican mem
bers of the Wavs and Means Com
mittee will not he called into consul
tation until after the Democratic eau
Gus shall have approved the bill as
drafted by the majority members of
the committee. The Republicans then
will be give nan opportunity to vote
for or against the Democratic meas
ure. which becomes a party measure
as soon as submitted to a binding
caucus.
Special Rule Probable For House.
As the House has made rapid prog
ress on the appropriation bills it is
probable the revenue bill will be pre-
scented for consideration under a spe-
cial rule within the next two weeks.
The revenue plans OF the Demo
Gratis, Of course. have not been
change as to the sale Of Panama
canal and other bonds. Secretary Nc
Adoo and Democrats of the House
committee recently estimated that
t2s9, 0OO, 900 in bonds must be sold to
care for such extraordinary expenses
as prepared and the mobilization OF
troops on the border. There are avail
able for sale 1921 900 900 in Panama
bonds.
II the Treasury runs short of
money to round out the current fiscal
year-which Is expected-the Demo