New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-12
pus;ness Men Urge Bond
Issues to Lessen
Burden
Hope for Big Cuts
In House Measure
Fordney Against Increase
in Profits Tax; Fears
Evasion

Wssbi,cton. MAY IA strong nope
80, ,he Senate will make smashing
-.,,,,;ors in the taxes imposed by
-. House revenue bill. and by the
-. n q larger proportion Of bonds
.,d the cost Of the war over a
.,,io3 Of wears. IS felt tonight by
-, scores OF representatives Of busi-
=. interests assembled here for the
,.,-nc on tho bill before the Senate
Finance Committee.
The hearing today ended with the
,-o,,., OF tobacco manufacturers
s,,m Chairman SimmOns's state
vo-,b Carolina They objected strong
10 % doubling the present tax on
.;r.rettes ard tobacco. declaring that
:, would lead 10 so much retrench-
nan, bv smokers and ohewers as to
s,,e.t the object OF the bill. They
.,;d II might lead 10 an actual re-
3,,,ion IN the revenue obtained, IN
....a - an increase. which. besides
;niurirc the government, would WORK
accumulation OF the tobacco busl-
,.,s They suggested that an m
erase Of 40 per cent on the tax
would probably increase the revenue
bv almost that amount. and pointed
49,, that the House had increased the
tax on cigars 20 per cent.
Merchants Say They Face Ruin
Manufacturer who would have to
n,r the increased excess profits tax
aistillers. brewers and soda fountain
interests affected by the higher rate
on alcoholic and soft@ drinks. all told
the Senate Committee that they raced
ruin il the bin went through as pre-
sented in the House. Nearly every
witness declared his particular bust
ness seemed 20 have been made the
target for an unjust and eXoroltant
tax.
In the House. too, many portions
Of the bill we're under FIRE. but the
reply Of Democratic and Republican
leaders was that the money must DC
raised and only high taxes could pro.
vide IL. Representative Fordney, or
Michigan. ranking Republican on the
Wavs and Means Committee, made a
sour-hour speech for the measure. lie
said he agreed with Democratic Lead
or Kitchin that the bill had some
fsuIts. but that. on the whole, 1t
was equitable. and should be passed
to meet the war emergency.
The income tax increases and the rise
in postal rates consumed a large part
OF the time to-day in the House debate.
Some Representatives suggested that
the tax on big incomes was not high
enough. and others opposed vigorously
the proposal 10 increase the postage
rate and second class matter by crea-
ton Of a zone system.
Replying 70 critics of the income tax
section. Mr.. Fordney told the House
that there is a limit 10 which the gov
eminent can 20 and take from man
his income until he begins to evade the
Law"
Fordney Warns of Evasion
There il no law in this country or
any other" he said, that compels a
corporation 10 pay dividends. The min
ute YOU have taxed the corporations to
q point where they see you are about
% confscste their property they will
pass 20 surplus their earnings, instead
Of paying il in dividends. In making up
these income tax rates the committee
was mindful Of these possibilities
Republican Leader Mann asked IL It
would not be fairer 10 tax newspaper
and magazine advertising than to put
the proposed additional postage rate on
second class matter.
Mr.. Fordney replied that this would
be q tax on volume Of business and
unjust
Representative Hull. of Iowa. also
opposed the increased rates for maya
lines and newspapers. and challenged
statements that the government now is
losing millions annually on this class
Of business. Representative Blank, OF
Indiana. told the House the Postofice
Department had worked out an amend
nent 20 provide that no salaries Of
postmasterS shall be increased during
he war The debate will be continued
tomorrow
II was a gloomy picture that pro
testantS against the war tax increases
painted for the Senate Committee. Dis
Organization Of industries, closed
ise,ories. discharged employees, reduced
priees 90 producers and destruction OF
retailers were among the predictions.
Representatives. Of national manu-
lecturers and industrial organizations
aeelared the excess profits tax was dis
eriminatory against corporations. IL
vas suggested that the tax burden be
distributed over several decades.
Oppose Stock Dividends Tax
Objections to the income taxes on
,'oek dividends were made by Paul ID.
Orsvath. representing Bethlehem Steel
Sompany stockholders; J. Kratz, Of
ne Lsekawsnna Steel Company, and
ndSsrd ". Wskely. Of the New Jersey
aoiie Service Corporation.
We DO not oppose any scheme OF
AR distribution Of these taxes, nor
'ne size Of the tax burden, nor the
suftaxes," said Mr.. Cravsth. "but an
income tax on stock dividends before
sntn conversion into cash is an unfair
@ne unequal distribution"
inclusion OF goodwill in calculating
.sP'esi Tor assessing the excess pronts
az was proposed by Joseph s. Auer-
seen' representing the Woolworth Com
.ohs said goodwill might be used
ana ~ 'Ai.tiei estimates u N"P,N
ne mus defeat taxation. and for that
s.ssson, ne said. Congress has so FAR
FUSED 70 estimate goodwill as a part
corporate capital. Artificial est
mates also could be made, he said, OF
value Of trade marks.
smes A. Emory, counsel for the Ma
.VoaA Association Of Manufacturers
o other organizations, which he said
ompnsed $500 corporations employ
"s <doe,Oo0 workmen, or 50 per cent