Bisbee daily review., 1917-08-07
SENATE COMMITTEE
 FAV0RABLY REPORTS
 ;, WAR TAX MEASURE
(Continued From Page One)

constantly in mind the fact that the amount of revenue derived from these sources would depend upon the pros perity and activity of business and that to impose taxes which would de pend upon the prosperity and activ- ity of business and that to impose tax es which would tend to discourage en- terprise and dampen these activities would tend to defeat the legislative purpose. Moreover, it thought that if the rates upon incomes and excess profits were fixed at the highest level there might be but little margin left for further increases in rates"
 The report defends the elimination of the so-called Lenroot surtaxes on incomes of over s4O,OOO added in the house, resigned to raise s66,0OO,O00 as follows:
 Tn view of the fact that in addi- ton to the large increase in the nor nal tax and surtaxes upon incomes. the bill provides for large increase in the war profits tax of corporations and partnerships and includes individ- uals in the scope of that tax, and in vie wof the probability that it will be necessary hereafter to further in crease these rates in order to provide for increased war expenditures, your committee believes that for the pres ent it is inadvisable to increase the surtax rates beyond those proposed in the original house bill"
 Higher Taxes Expected.
 This tax seemed in principle both morally and economically unsound In- comes of the last year have paid their taxes and the balance has either been spent or saved and added to cap ital, in which form it will yield re- turns in the ensuing years. To tax this tax paid income again is not only double taxation of peculiar obnox- ious kind but would possibly compel d tax payer to impair his capital 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 uncertain ty."
 In recommending the graduated war profits tax upon individuals as well as corporations in lieu of the present eight per cent excessi profits law, the committee said it's plan is similar to that of European countries, where it has had marked success.
 we must face the possibility. even the probability" the report stated, i"oi even higher taxes than are now pro posed in this country and we must ad- just our system so 3hat it will. work satisfactorily even snnder increased rates. Your committee has not been able to find any satisfactory req son why Individuals sengaged in trade and business should not be subject to this tax Cwar profits) as well as cor porations 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 sit nation. Senator Simmons also pointed out that the ne wplan is war profits tax rather than nexcess profits levy.
 Household Taxes Omitted.
 The new tax of one cent for each 9 cents paid on parcels post packages was said in the report to remc-a dis crimination in favor of the railroads and the parcels post
 Tn addition to this, the report said your committee can see no intrinsic reason why. in this present emergency the government should not impose a tax upon this method Of transportation especially in view ofthe fact that the rates on first and second class mai are increased"
 The house five per cent taxes upo:. electricity, gas and local telephone ser vice were eliminated because it ap- peared to the committee that t-'s taA would fall with very great severity up on the people of moderate means a. well as the poorest classes, who at the present time depend very largely in the cities upon gas or electricity to furnish them with both light and hea' for cooking as well as, in many cases, with power for running small machin cry like that of the sewing machine The committee felt that a tax of this character ought not to be imposed unless a point was reached where 1t would become necessary to tax every thing susceptible to taxation. Light and heat are the very last things which should be subject to taxation. For similar reasons the committee recommended that the tax upon charg es for telephone service to subscribers be eliminated.