The evening world., 1917-05-11
HEARING ON WAR TAX
BILL BRINGS PROTEST
FROM CORPORATIONS
Steel Men Object to Proposed Levy
on Stock Dividends, but
Favor Income Tax.

WASHINGTON, May 1.-THE Sell
ate Finance Committee to-day began
It's hearings on the war revenue
measure. Testimony from those az
fected by the income. excess profits.
beverages and tobacco taxes were
heard.
Paul d. cravath. Bethlehem Steel
Company. and J. A. KratE, Lsaoka-
wanna Steel Company. speaking on
the income tax. objected TO a tax on
stock dividends. They said none OF
their shareholders objected to a tax
on incomes, but pointed out that stock
dividends really don't amount TO
actual dividends, because they take
nothing from the corporation and add
nothing to the income OF the stock
holders. On the contrary. they held
IL such stock dividends were taxed II
would amount TO a tax on the stock
holdsrs' capital.
Kratz pointed out that frequently
there would be double taxation because
stock Of subsidiaries taxed might be
the property OF the same man who
owned stock of the parent company
which also would be taxed.
Both closed by urging particularly
that stock dividend allotted before the
law takes effect be exempted.
Inclusion OF good will In calculating
ca pital for assessing the excess proflts
tax was proposed by Joseph S. Auer-
bach, representing the Woolworth
I Company OF New York.
Limitation Of excess profits tax 10
capital and assets OF foreign fire and
marine insurance companies actually
used In this country was urged by
A. B. Thatcher OF New York, repre-
He urged that the Income from Sc
curities held by such companies
abroad and not used in their Ameri-
can business should be exempt from
the tax.
The excess profits tax OF the House
bill was declared unfair and inequit-
able by James A. Emory, counsel for
1 the National Association OF Manufac-
| .urers and other organizations, which
le said comprise 5000 corporations
Employing 2.75o.oo0 workmen, or 65
Der cent.
A general attack upon the whole
Ill was made by Cameron Morrison
Il Charlotte, n. c.. representing the
american Cotton Manufacturers As
ISOLATION.
Equal and increased taxes on alco-
lol for beverage purposes, whether
made from sugar. molasses or grain
we're urged by James T.. MoGovern
OF the United States Industrial Alco-
,oi Company. He said industrial
,istillers believe alcohol products will
| - Nn
and that the House bill removes dis.
rlmination now existing between
hose distillinE from sugar beets and
cane and from grain.
Increased taxes proposed on bee
rom $3.50 to 32.75 a barrel, Rober
Grain OF the United States Brewers
association told the committee vii
nut many small brewers out OF busi
ness.
But I am not here TO protes
. lgainst this tax" he said. "Whateve
lax Congress may put on the brew
ers, after careful consideration, vii
be willingly and gladly bowed to. w
, are hopeful. however, that this oner
GUS tax Will be reduced. A tax to-
heavy will destroy large investment
, in breweries."
! The committee expects 20 complet
! hearings next Tuesday night and al
. briefs must be In by that time.
Debate In the House on the meas
ure continued all afternoon.
!. There are many inequalities d
T this bill, but I am going to vote 70
y because I am Roman and STAN
e by the majority" said Mr.. Fordne
in going over the various items 4
= support OF his contention that NOR
u than $4,000, 900, 900 would be raised
70 Nlll were enacted into law as
|, stands.
= The committee looked around I
: collect money where Il would not IN
. iure any Industry or the great masse
. OF the people" he declared. "Ther
y Ia n limit to which we can go /
n taxing incomes"