The Birmingham age-herald., 1917-07-10
GOVERNMENT TO FIX PRICES
By HOLLAND

profits. An operation of this kind would seem like paying money out of one pock- ct by transferring it to another pocket.
 Some of those in this city who have recently been in Washington and have ! in that way come in close tdAch with administration circles are persuaded that the government will fix prices that ara fair and reasonable and probably in ex- cess of the minimum amount of net profits which are exempt from taxa tion. But If it does that it will recover part of the money that it paid for these commodities because 1t will exact whatever excess profits tax the law inn poses,
 As much as 50 per cent of excess prof
 it's will be exacted by the government law in case the excess profits reach figure which of itself Is In excess of the capitalization of all but very few American corporations.s The estimate Is made that no more than five industries will be called upon to pay tax upon excess profits that are greater than S900,- 000,00O or S400 000,000 The five industries which 1t is presumed will be called upon by the tax collectors to pay tax that will absorb from 40 per cent to 50 per cent of the profits which are in excess of certain arbitrarily established fig- ure, are occupied, first, with the manu- facture of steel. Presumably the great- est tax taken from excess profits will be paid by the United States Steel corpora tion. Charles M. Sch-~ab will turn over to the government a good many millions taken out of the excess profits cf the Bethlehem Steel company. Another jn- dustrv which will be compelled 10 pay over many millions, nobody can tell exsr' actly how rlnch. is represented by tho& manufacturers of automobiles Possibly the rrcfitjs ot some of these corporations k hxr nf hn that they will be occupied in meeting the governments demand for airplanes- third industry that will pay millions to the government out of the excess profits is the copper industry associated with other mining industries. fourth is the industry occupied with making munitions and a fifth the industry whose product is powder and other ex- plosives These five will, it is pre- suned, be almost exclusively the corpo- rations that will be compelled to pay from 10 per cent to 50 per cent of the excess profits to the government in tho form o' taxes.
 There seems to be no doubt that the imposition of an excess income tax will compel some readjustment of industrial activities. The government is to re- ceive if present expectations which may be exaggerated do not prove dlSappolnt- ing, from s6O0, ,0e0, GOO to $700,0o0000 from excess profit taxes. All this money goes directly back to the people, for it will be paid out by the government on Ac- count of purchases. which in the aggre- gate for the next 12 months will be stu- pandous. These governmental demands upon manufacturing plants will make 1t necessary to defer acceptance of orders from domestic industries and this will entail some extensive establishments. Nevertheless, there will be no real dis turbance of business. Much curiosity is expressed over the machinery by which the government will establish actual ex- X cess profits One question frequently asked is this: How is the government to get at excess profits in the case Of corporations which were not organized until after the beginning of the war with Germany?