New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-03
Senate Leader Predicts
New Measure When Con.
gress Meets in December
Warns Big Business
Finance Committee Plans to
Levy on Surpluses to Sur
prise Corporations
Especial correspondence

WASHINGTON, Sept. From now
on the fight on the war profits section
of the revenue bill is n political fight.
The men who support the committee
plan, which now seems assured OF sue
cess, will be held up to the country by
the wealth conscriptionists as the men
responsible for so much Of the burden
of the war being placed on the little
fellow.
"By the time we come back mere in
December" said one Of the radical
leaders to The Tribune correspondent
tonight, "the Finance Committee will
hold hurried meeting and report out
straight out war profits tax measure
as a substitute for this thing which now
probably will go through.
Big business, always slow to find
out just what a tax measure will do in
the way of imposing burdens, will be
pleading with tears in its eyes for
revision Of the measure. Why, ! really
believe, il the heads OF those concerns
sometimes characterized as legitimate
business, could realize what the COM
mittee plan will do to them, when cou-
pied with the increase in the corpora
,ion income tax, they would be down
here now lobbying for the Johnson
amendment"
tg tu ~
there is little doubt that the business
interests of the country have not gone
very far below the surface In studying
the tax bill.
Country Has Not Been Heard From
For instance, very little has been
heard from the country on the propo-
sal TO tax undistributed SURPRISES.
The Senate boosted the tax on corpo-
ration incomes from per cent TO s
per cent. which hits all corporations
before any levy on war profits is
made, but, in addition, there is this
little section:
an addition to the income tax i'm
posed by Subdivision A of this sec
ton, there shall be levied. assessed,
collected and paid annually an addi-
tionsl tax of 10 per cent upon the
amount, remaining undistributed six
months after the end of each calen-
dor or fiscal year, of the total net in
come of every corporation, joint stock
company or association or insurance
company, received during the year
There is a saving clause, little lower
down, which reads as follows:
THE tax imposed by this subdivi-
sion shall not apply TO that portion
Of such undistributed net income
which Is actually invested and en-
ployed in the business or is retained
for employment in the reasonable re-
quirements of the business"
May Worry Corporations
Then comes a provision, however,
which may cause wrinkles IN corpora
ton lawyers brows:
Provided, that if the Secretary of
the Treasury ascertains and finds that
any portion of such amount so retained
at any time for employment in the
business is not so employed, or is not
reasonably required in the business, a
tax of 10 per cent shall be levied, as
sessed collected and paid thereon, and
the finding and ruling of the Secretary
of the Treasury IN any and all such
cases shall be conclusive and final
This might work out in most inter
esting way in the case of the Ford
Motor Company, for instance. The
Ford company is now being sued in
court by the Dodge Brothers, who own
some Of the Ford stock. Dodge Broth
ers allege that Henry Ford is with
holding dividends on Ford stock in or
der 10 develop a smelter which is Of
doubtful value to the Ford plant.
II the proposed amendment had been
enacted last year instead of this, Sec
rotary Of the Treasury McAdoo might
have the final say as TO whether that
money being spent by Henry Ford was
really reasonably required in the bust
ness" II he thought it was not, he
could levy little tax Of Is per cent
of the entire amount proposed TO be
spent for the smelling plant.