Evening star., 1917-09-30
WAR TAX MEASURE
NODDED TO FINAL
FORMFOR REPORT
Conferees From Both Houses
Agree, and Bill Goes to
Lower Body Tomorrow.
ADOPT NEW SYSTEM
FOR EXCESS PROFITS
Senate and House Committeeman Say
Compromise Is Better Than
Original Drafts.

Original Drafts.
House and Senate conferees on the war
tax bill reached final agreement on that
measure late yesterday. and the report
will be presented to the House tomor-
row. The conferees made no change in
the approximate levies on war excess
profits and incomes. They provided.
however, new system of calculating
excess profits.
Basis of Excess Profits Tax.
The report provides that the graduate
tax of 20 to so per cent on excess
profits of corporations. partnerships
and individuals shall be levied on a
basis of invested capital compared
with invested capital of the three pre-
war years of 1911, 1912, 1913. This is
a substitute for the Senate taxes of
1o to so per cent. based upon SINH
lar comparison of pre-war and pres
ant profits.
The graduated excess profits rates are
20 per cent of excess profits not in
excess of 15 per cent of the invested
capital for the taxable year, 2o per cent
on profits in excess of 10 per cent and
not over 20 per cent OF such capital;
IS per cent on excess over 20 and under
25 per cent OF capital: 45 per cent on
excess over 2o per cent and under SO
per cent of capital, and a maximum of
60 per cent on profits in excess of SO
per cent of such capital.
Meaning of Invested Capital"
In calculating war excess Drofits the
term invested capital of corporations
and partnerships was declared to include
actual cash paid in, actual cash value
Of other tangible property paid for stock
or shares at the time of payment or.
January i. 1914 but in no case to exceed
the par value OF the original securities:
paid in or earned surplus. and undivided
profits used or employed in the business.
exclusive of undivided profits earned dur
ing the taxable year
The allowances for intangible assets in
clude actual cash value of patents and
at the time of payment good will,
trademarks, trade brands. franchises
80. il for bona fide payments not to ex-
1t stipulated that such intangible
assets exchanged for securities before
March 3, 1917, not exceeding 20 per
cent of the total shall be included at a
value not exceeding a fair cash value at
the time Of purchase.
Rearrangement of Surtaxes.
The income tax section virtually was
unchanged, except for Encouragement
of sprtaxes on incomes between $4,000
land $4,000. The graduated surtaxes
of from ] to so per cent on incomes
from $4,000 to those of a million dollars
and over were approved
The, Senate increase of from to
per cent of the income tax on corpor-
ations, joint stock companies and in
surance companies was approved, to-
.gether with the new normal individual
tax of per cent on incomes of unmar-
ried persons in excess of $1,000 and of
married persons of more than $4,000.
In lieu of the House zone tax on
second class publications, the con-
ferees included a new zone system eff
fective July l. 1915. with different rates
for reading matter and advertising
matter with special. but increased rates
for religious. agricultural and other
publications.
Increase on Reading Matter.
A fat increase on reading matter of
y Of a cent per pound until July l, 1919,
and u cent thereafter was provided Ad-
vertising matter exceeding per cent of
the total space would be taxed from II
to :14 cents additional until July /, 1919
and from u to AZ cents more until July
!, 1920; and from q cent to So. cents to
1921, and from / cent to cents there
after. An additional tax of Il cent per
pound until July 1. 1919, and Il cent
thereafter on religious. agricultural, fra
ternal and similar publications was
adopted.
The 1 cent tax on letters. excepting
drop letters and postal cards, was re-
stored by the conferees 1t is estimated
to raise about 500 000, ,00o and is effect
ivexthirty days after the passage of the
acH The Senate provision exempting
from postage letters written by soldiers
and sailors abroad was retained
Levy on Transportation.
The conferees levied per cent in
lieu of the Senate rate of and the
House rate Of 10 per cent on passenger
transportation, estimated to raise from
the compromise levy about 100000, 900
instead of s37,500, ,000 under the Senate
plan. The per cent tax on freight
transportation was retained and the tax
on express transportation was increased
so that ! cent would be levied on each
90 cents paid instead of each 25 cents.
The House 10 per cent tax on Pullman
accommodations. cut to ) per cent by
the Senate, was restored and is esti-
mated to raise $4,000, 900.
In lieu Of the House ) per cent tax
on sales of automobiles by nlanufactur-
ers and the Senate federal license tax
on owners, the conferees adopted a 8
per cent tax on all motor vehicles, in
Guiding trucks, payable by manufac-
turers, producers and importers.
Taxes of per cent on manufac-
turers' sales of musical instruments
and jewelry also We're written in, with
a tax of u eif a cent foot on motion
picture film.
Sporting Goods and Cameras.
On sporting goods the revised bill
levied per cent on manufacturers
sales instead of per cent, proposed
by the House. and per cent by the
Senate. The per cent levy also was
adopted for cameras. in lieu of the
Senate per cent rate, and chewing
gum manufacturers would be taxed
per cent of gross sales, a reduction OF
3 per cent from the House rate
The Senate per cent manufacturers
sales taxes on perfumes and paten
medicines were retained.
The Senate one-cent stamp tax or
bank checks was not restored but il,
tax of one cent on parcel post package.
costing rs cents or more was retained
Other stamp taxes, all made effectiv,
December /, were retained and tn.
House tax on indemnity bonds restored
New Inheritance Tax System.
A new system of graduated inheri
tance taxes was written into the bill