The sun., 1917-05-25
Finance Committee to Trim
$1,870,O00,00 House Meas
ure to $1,250,0O0,0O0.
NEW INCOME TAXES
Retroactive Features and
LenrOOt SurtaX Increase
Likely to Go.
CHANGE IN PROFITS LEVY
Issuance Of More Bonds Urged
to Meet Requirements
Of War.

or war.
WAsHISoToN. May 24.-With the
$3.50, 100000 revenue bill just passed
by the House now formally before 1t
the Senate Committee on Finance be.
gan to-day the redrafting OF that
measure. 1t was evident that the
pruning knife is to be used with both
force and zeal on the bill drawn by
Mr.. Kitchin and his colleagues in the
House, many of whom passed the bill
on to the Senate in the hope that a
measure based on more scientific prin-
clples would be drawn by that body.
In the belief that the House bill pro-
vides altogether more revenue than
the needs OF the forthcoming fiscal
year demand the Senate Committee
intends to eliminate many OF the most
! important and drastic features Of that
measure.
! Changes Agreed To.
\ ihtuuNtiou "a liAc 6iOso tdA lcN. VI
the bill by about one-third. or to about
$3.50, 900, 900. is said TO be favored BY
| most of the committeeman. il Is deemed
| certain. at least, that the aggregate tax
burden will not be increased and that
the committee will not consider adding
tho extra estimates OF S445.000.000 re-
Gently submitted by the Treasury De-
partment. Short term bonds to take
care Of the millions by which the total
levy for this year probably will be re-
duced apparently are generally favored.
Chairman Simmons announced after
today's meeting that the committee had
agreed to the following changes in the
House measure.
To strike out the additional retro
u active income tax on incomes earned
in 1916
To strike out all provisions for in
creased second class mail rates under
the zone system, and substitute
low direct tax (probably about per
cent? on all advertising, including
that in newspapers and magazines and
on billboards, posters and street cars;
and
=. To substitute for the House excess
profits tax OH profits over 5 per cent.
of Invested capital. an excess profits
tax based instead on average profits =.
for a period of years. not more than
: five.
t s1OS,OOO,OOO Loss In Income.
! Elimination Of the retroactive tax on
1916 incomes. Senator Simmons esti-
, mated. alone would result in reduction
! OF the House bills tax levy by Sl0s,-
900, 900.
Newspapers and magazines have
fought the proposed zone system In
creases. declaring they would be ruinous
to many publications The loss of rev.
enue by elimination OF the section win
= be partly IL not wholly recouped. the
. committee believes by tac proposed
- = per cent. tax on all advertising.
The excess profits tax principle adopted
[ to-day. the committeeman say, would
greatly relieve this years tax burdens
upon business interests generally. pro-
vide a more equitable basis ot taxation
l and also increase by many millions the
x net revenue returns. Some corporations
l. have complained that not until last year
!. or this have they made normal profits
n While not finally decided, the committee
: apparently favors retaining tho House
e rate of l6 per cent on excess profits
s over earnings OF S per cent. but with
e invested capital abandoned as the basis
o of taxation calculation aud the period OF
II years average substituted
s The elimination OF the House pro-
| N'''S >"''N'''" '"''S' W N'llG'i
- most aricles now OH the Tree list would
% Dc taxed 10 per cent. and 10 per cent.
added 10 the present dutiahle list was
. discussed rms section would have
It raised s200.000,000.
"' muse Why "o'
I II was proposed that the now incoms
Kitchin hill witch would moan tha
~ elimination or the Lenroot amendment
increasing the supertaNtS on taxes OF
SAV'ooo OF more. !le'dlnS II was esti'
mated. an ddhluoha! SoV,VVV'oou. The
committee discussed ohiy briefly me
, nroad question OF income YAK Fates' ths
: Rouse new normal ''A' reduced eScnp
uoh pases ana increase suf'aNes ano
reacned no decisions
Al So"s,uer1',o, , ~ "'.ns snen va, .s'