The Washington herald., 1917-06-05
HOLLAND LETTER
The Biggest Daily
Financial News Feature Of
the cOunry's Best Newspapers.

I
Otto II. Kahn. an international
banker, OF much authority on economic
professor of political economy at CO.
lumbia University in recent COM
munications upon war taxation, sub.
| stantially agree respecting what
should be and what should not be
done.
Mr.. Kahn recently asserted that IL
the Federal senate should so perfect
| the war-tax bill as to include an ex-
cess profit tax which might well be
as much as 30 per cent or even more,
the probability Is that the tax would
| yield not far from $500, ,000.0 900.
These figures are substantially the
same as are those set forth by Prof.
Seligman in an article lately pub
lished. Both Prof Seligman and Mr..
Kahn agree that the proposed tax in
| the House bill of 16 per cent upon
profits would not yield nearly as much
, as a tax of, say, 30 per cent, or ap-
proximately that figure. upon real
excess profits. Both agree in the
opinion that the so-called excess pro-
fit tax, now under consideration at
or just sense of the word. a tax on
excess profits, but substantially a tax
upon all profits.
1t is this proposition which has
given business men much concern.
They believe, as do also these two
high authorities. that the excess pro-
FITS should be figured on such profits
as are obtained over and above the
average earnings during the three
years of the present war. These
would be war profits. Mr.. Kahn and
Mr. Scligman are fortified by figures
prepared for them by one of the
ablest statisticians and actuaries in
the financial district, a man who is
also very familiar with domestic and
international banking.
He obtained his figures from
authoritative sources In England.
There, in order not greatly to impair
business, but instead OF that, to
stimulate II. excess profits were re-
Earded as those which were in excess
of an average profit obtained by
business in Great Britain in three
years of normal conditions.
May Inuence CowmIttee.
These communications. as we'll as
good many which have been sent
! 20 members Of Congress by men who
| have studied this question, will it is
thought, serve to influence the COM
mittee OF which Senator Simmons is
chairman. so that 1t will be able un-
| dnimously to report in favor OF high
| Should the committee thus report and
should Congress adopt the report
| business interests will be gratihed
since there is no disposition 10 avoid
| the payment of a heavy tax, even
as much as 30 per cent, upon profits
which are in excess of the average
profits gained in normal times.
Ever since the Senate and the COM
mittee of which Senator Simmons is
| chairman, has had the House war
revenue bill, confidence has been eX-
| pressed among business men and tinan-
! Ciors. not only in the Carnestness and
| sincerit of Senator Simmons and his
| committee, but also in their ability to
! work out a wise and raCtiCable war
revenue tax measure, which will not
| impair business, but instead will slim
| ulaJr It..
! 1t is recalled that at the time the
tFCdcral Reserve banking bill was un
! der consideration it was deemed exPe-
| expert authority should be called into
J consultation. The advice given by
| these men did much to correct vari-
| GUS imperfcCtiOns in the bill as 1t was
! originally drafted. So now 1t is re-
! gardc1 as eNpedient for Senators to
! liS;en to counsel offered by men VINO
are competent 10 give good counsel
! and there are excellent reasons for
| believing that counsel of this kind,
! much Of 1t communicated by letter,
! has been carefully considered by SEN
! atOr Simmons's committee.
Might Hear BUsluesS.
| Mr.. Kahn says that it would not be
! nmirs for the government TO give
/ some heed to the practical experience
| and JUDGMENT of business men while
: considering the war revenue tax bill.
y The statesmen of Great Britain did
! this and found that service OF that
/ kind was of great value. Mr.. Kahn
s9}S that he is certain that competent
| sDokCsmcn Of the business community
would give their time and their dis
! interested service to the task of CO.
! operating in dCvising a wise and fair
| scheme of taxation. just as readily
| as they have already done and are
still doing to the task of placing the
! Word comes from Washington that
I ncItOns, in al agGregating signatures
! Of some 100" persons. have been
| circulated in Congress with intent to
/ persuade that body to tax in fun arl
| some would put the limit at $500 900.
| II this We're done, the government
! might in the first year get a large
| revenue, but there would be a heavy
! falling off in income revenues after
! the first year. Moreover, all those
/ who are competent TO speak say that
! an excessive income tax. which has
| been avoided by Great Britain,
! Canada going so far as to have even
| no federal income tax, would surely
! disloCate capital and might drive
| much of II out of the country.
While the British commission was
! in Washington, its members did not,
! even indirectly. offer any suggestions
| based upon EnGland's experience in
| taxation since the war began. They
! are understood to have said, as Lord
J Cunlihe said in private, that England
! has succeeded in preventing a violent
| financial disIocation of the kind that
| would be caused unless taxation were
| apportioncd both with good judgment
. and in accordance with the principle
| of the scientific law of taxation.
To High n Tax.
The best Judgment appears to be
! that war revenue tax bill that would
I return to the government a billion,
! eight hundred million dollars, pro-
| yides for excessive taxation and that
| Is something that should be avoided
in the interests of business.
| Prof. Seligman is persuaded that a
| hlllon ana a quarter, or perhaps a
7 little more, would be a sufficient
amount 10 raise by extra taxation.
And he bases his Judgment not upon
guess, but upon what he deems
| criticism.
One Of the greatest o. American
bankers said few days ago that the
Itlatloh OF taxes to loans is really a
pureY business proposition. That
statement in almost precisely these
words was made by Prof Seligman,
take If We did not relv TO a Iarra e9-
war. ~ ~ VI 'he
HOLLAND.
FOFfhcnn1ino H.,n.. p.Ir.