The sun. [volume] (New York [N.Y.]) 1916-1920, 1917-10-05
REPEAL SOUGHT
FOR JOKER HID
IN PROFITS TAX
Interpolated Section Would
Take 3 Per Cent. of Salaries
Above $4,000 a Year.
HULL LEADS IN ATTACK
Senator WadswOrth Says 1t
Penalties Farmers to the
Gain of the DrOnes.
.ULL LEADS IN ATTACK
Special Despdtch to The Sun.

WASHINGTON. Oct 4.--There came de-
cided indication tonight that Con-
gress would at its December sitting re-
peal the Joker" section Of the war reve-
nue. bill under which tax OF S per cent.
is levied upon the earnings of all sala-
ried men in excess Of $4,000 a year.
This provision. according to the men
most qualified to know. was slipped into
the bill without general knowledge on
the part OF the members Of Congress
and does not express the intentions of
the legislative body.
Representative Cordell Hull Of Ten
nessee was particularly active to-day in
working for the repeal OF the section.
He held a number Of conferences with
members Of the conference committee,
and Is to take the matter up with them
again tomorrow.
Representatives kitchin and Fordney,
beth members OF the House Conference
Committee. said tonight that when the
section was framed II was intended
solely to reach professional men, and
men in business with no appreciable
capital, but who earned profits in excess
! vi SnVV" NJ Intention tdXlUK Sal
aried men was In the minds Of the
| legislators. they said.
Federal Employees Exempt.
! In addition to this assurance. it was
pointed out that Senator Wordsworth Of
| New York had attacked the suggestion
as "the taxation OF the earners to the
gain OF the drones.' and had pointed
out that the man who did nothing but
I sit back and cut coupons would not pay
the tax. while the man who worked
daily for salary would shoulder the
: burden that the drone escaped.
| The exemption Of members Of the Con-
gress from the taxing sections effect
caused much criticism.
/ The Joker appears to lie In the fol-
: lowing language inserted by the con-
ferees: y
This title shall apply to all trades or
business OF whatever description. whether
continuously carried on or not except
in the case OF officers and employees
under the United States. or any state.
Territory or the District OF Columbia
or any local subdivision thereof. the
compensation o. fees by them as such
| officers OF employees"
J This exemption appears to have been
. framed by the conferees with particular
application to section 209 OF the same
title. which was added by the conferees.
and represents a form of tax found in
neither the House nor Senate bills.
This section lev.es an per cent. tax
on the net inrom in the case of a trade
or business having no invested capital or
not more than IA normal capital, when
such net income is in excess of the fol-
lowing deductions: In the case of do
nestle corporation. $4,000 in the case
OF a domestic partnership or citl-
zen or resident OF the United States
$4,000: in the case OF all other trades
or business, no deductions.
Senator Wadsworth, like many others
held to the view that as worded this
section plainly applied not only to part
nerships and corporations. but to an,
individual earning "A salary OF more thar
$4,000 year. particularly as under the
same title il is expressly stated that tn.
terms trade and business" shall in
clude professions and occupations"
Coupon Cutters Escape Burden.
The effect OF this. as Senator WAITS
worth pointed out will he to tax tn,
man earning salary OF over Sc, 900 thi,
additional per cent. over his heavy In
come taxes. while the man who can af
ford to do nothing and merely Gu
coupons escapes entirely from this ex
ira burden.
The only other class to escape thi
tax would he Government officials, in
cluding Senators and Representatives
this by reason OF careful insertion o
the exemption clause referred to,
An example OF how this would wor,
would be the case Of man on a salar.