The sun., 1917-04-16
'AD0O'S PLAN
FOR WAR TAXES
Drastic Scheme to Raise
$780,, ,25O,OOO Revenue
Announced.
BIG INCOMES HIT 40 P. c..
Administration Draft Is Sent
to House and Senate
Committees.

WAsHINcToN, April 15.-Administra.
ton suggestions as to possible new
sources OF taxation through which to
raise approximately one-half Of the esti-
mated cost of the FIRST year Of the war,
or Sl.S07.250. .000. were submitted by
Secretary McAdoo tonight to the Senate
Finance Committee and the House Ways
and Means Committee The other half
OF the cost is to be provided by $4,000
100000 of the bonds authorized by the
war revenue bill passed Saturday by the
House, which is expected to pass the
Senate this week.
Outstanding in the suggestions are
greatly increased income and excess
profit tax rates taxing Of many imported
articles now admitted free and stamp.
liquor. amusement, sugar, coffee. tobac-
co, soft drink, freight and passenger
transportation receipt and automobile
taxes. All Of the data is sent to Con-
gress for its information and without
Recommendations from the Treasury.
Incomes to He Hard Hit.
Probably the most far reaching pro-
posal concerns income taxes. The Sec
retary estimates that a 80 per cent. In
crease on both individuals and corpora
tions for 1916. collectable next June.
would yield S165. 100000 additional For
1917. he points out, to lower the in
come tax exemption from $4,000 to ST.
500 for unmarried persons. from $4,000
to $4,000 for married persons. to leave
the normal tax at per cent. but to
raise tho supertaXes materially would
make the law produce s34O, ,00O, 900 ad-
ditioral ID June, 1918, without changing
the corporation tax. The highest rate
on supertaxes under the plan outlined
would he 40 per cent of all incomes over
S1,000,O 900
Increases In the excess profit tax both
by making the present law applicable to
the calendar year of 1916 and applying
new Increases next year he thinks
would raise S226.0 900 this year and
s2O0.00o,00o additional next year.
Taxes From other Sources.
Other sources, the Secretary believes
could be made TO yield additional income
as follows: Taxes on articles now ad-
mitted free. s206,00OO 900; freight trans
portation receipts. 100000, 900: excise
tax on sugar, s92 100000 refined petro-
leum, s75,00o,ooo stamp taxes on thea
tire. baseball and other amusement tick
cts s75,00O.0o0; distilled spirits. s74,-
s5l,600. 900: transportation receipts, pas.
senger, s35,oOO,oOO fermented liquors.
s3o.ooo.00o; smoking and chewing to-
bacco, $25.00O.000 automobiles. trucks
motorcycles, Sl9 500. 900 soft drinks s19-
00,000 cigarettes, Sl7.000,000; rectified
liquor, l2,50o,0oO; cigars, 3l1,6O0. 900
excise tax on musical instruments. graph
ophones. sc, s7,Oo0O0O; wines, &c.
s6.750, 900 excise tax on glucose, $4,000
oOo denatured alcohol. $4,000, 900; deal
ers in cigars. cigarettes. &c. S4,s00,00
wholesale dealers and tobbers in to-
| bacco, s2,500.000. and snuff. s1,500,0oO.
Supertaxes on Incomes.
The revised arrangement OF super.
taxes on incomes as outlined would he,
Incomes of S3.o0O to $4,000. 1 per cent.
s4.O%N To $4,000. 2 per cont, $1,000 to
xIO.O0O. s per cent, $4,000 to $50 1000
per cent, S2O.OOO to S4O,OOO. y per
cent; s4O.OON to xGO,OOO. 10 per cent
&GO,Otk, to SSO.ODO, ~ per cent SSO,OO0
10 SIOO.OtO, IS per centj SIOO.OOO to
aI5O.OtpO. 70 per cent; &ISO.OOO to s2OO..
mn. 25 per cent, S2OO.OOO TO ~ 5000
331z per cent, s1yOOO.OOO and over. 40
per cent.
This revenue" Mr.. McAdoo wrote
would be further increased If the In
| ties and State and municipal salaries
| were made subject to the income tax
II the present excess pronts tax Of
| per cent. on corporation and partner
| ship profits OF more than $4,000 and
| per cent. of invested capital were made
| applicable to the calendar year 1915, the
| Secretary estimates. II would yield $226..
900, 900. Corporations and partnerships
would be given until September to pay
the tax.
R425.OOO.OO In Excess Pronts.
AS to the excess profits tax for 1917
| collectible In June, 1918, the existing Law
allows an exemption Of $1,000 and S per
! cent. on invested capital and levies
per cent. tax on the remainder OF the
J profits OF corporations and partnerships
| II this tax, allowing the same exemp-
tons, were increased to 10 per cent. or
profits In excess OF per cent and not
over Is per cent. OF capital invested, tc
| IS per cent on profits In excess OF s
per cent. and not over 25 per cent. o:
| capital invested. to 20 per cent. on profits
| IN excess of 25 per cent. and not over
| 80 per cent, of capital invested. and &c
| 25 per cent. on profits in eNCess OF SO
per cent. OF capital invested, tho law
| according to the Secretary. would yield
| Si25. 100000.
Proposed revenue from passenger
transportation receipts IL estimated or
| the basis of II per cent. on each 25 cen
fare or fraction thereof within the
| United States" but mo tax on fare no
in excess of 25 cents Freight trans
portation. It is estimated. would yiek
500. .O0O. 900 at ! per cent on each 2.
cents or fraction thereof Of each freish
bill,
| An increase of 81 per gallon on dis
titled spirits now taxed $40. the Secre
tary says. would raise s73. 200. 900. Rec
! tilted spirits are not taxed now. and 4
Is suggested that they be taxed 25 cent.
per gallon. Instead OF the rate OF 81 81
per barrel on fermented liquors. $2.5t
per barrel is suggested.
The Secretary's schedule would doubl.