Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1917-08-06

amount OF revenue derived from these
sources would depend upon the pros
perity and activity OF business and that
to impose taxes which would tend to
discourage enterprise and dampen these
activities would tend to defeat the leg
islative purpose. Moreover, 1t thought
that II the rates upon incomes and ex-
cess profits were fixed at the highest
level there might be but little margin
left for further increase in rates"
The report defends the elimination
OF the so-called Ienroot surtaxes on
incomes OF over $4,000 added In the
house, designed to raise SS6,oa0.o00 as
follows:
"In view OF the fact the>S addition
to the large increase in<,s formal tax
and surtaxes upon ~ .es, the bill
provides for a large : 4ase in the war
profits tax Of corpc = ,ns and partner
ships and includ !, ndividuals in tn
scope OF that = and in view OF the
probability tn it will be necessary
hereafter to l4rther increase these
rates in order to provide for increased
war expenditures. your committee be-
lieves that for the present 1t is inadvis-
dDle 10 llCItdSc IiS Sui tuN AoSSS wy e''NA
those proposed In the original house
bill"
Regarding the elimination Of the
house retroactive income taxes on 1915
Incomes. which would have produced
s10s000,000. the report stated:
This tax seemed in principle both
morally and economically unsound.
Incomes of the last year have paid their
taxes and the balance has either been
spent or saved and added to capital,
in which form it will yield returns in
the ensuing years To tax this tax paid
income again is not only double taxa
tion of peculiarly obnoxious kind but
would possibly compel tax payer to
impair his capital. and thus diminish
government sources OF taxation. It
would be one of those disturbing. taxes
which would alarm business and check
Industrial productivity. 1t is very poor
economy and would hold out a threat
Of uncertainty"
War Tax Profits.
In recommending the graduated war
profits tax upon indiyiduals as well as
corporations in lieu Of the present eight
per cent excess profits law, the COM
mittee said It's plan is similar to that
Of European countries, where it has
had marked success.
I'VE must face the possibility, even
the probability" the report stated, "of
even higher taxes than are now propos-
ed in this country and we must adjust
our system SO that It vii! work satis-
factorily even under increased rates.
Your committee has not been able to
find any satisfactory reason why In
dividuals engaged in trade and bust
ness should not be subject to this tax
(war profits) as well as corporations
and partnerships.r Under the present
law The report stated inflated ynlues
to patent and trade marks and water
ing Of corporations stocks makes eva
sion of the revenue law possible, while
the committees new basis is believed
to meet the situation. Senator Simmons
also pointed out that the new plan Is
war profits tax rather than an excess
profits levy.
The new tax Of one cent for each s5
cents paid on parcels post packages
was said in the report to remove dis
elimination in favor Of the railroads
and the parcels post.
TN addition to this" the report said.
your committee can see no intrinsic
reason why In this present emergency
the government should not impose a
tax upon this method OF transportation,
especially in view Of the fact that the
rates on first and second class mail are
increased"
The house per cent taxes upon cleo
tricity, gas and local telephone service
were eliminated because ut appeared
to the committee that this tax would
fall with very great severity upon the
people OF moderate means as we'll as
the poorest classes, who at the present
time depend very largely In the cities
upon gas or electricity to furnish them
with both light and heat for cooking as
well as, in many cases, with power for
running small machinery like that Of
the sewing machine. The committee
felt tax OF this character ought not
to be imposed unless a point was
reached where it would become neces-
sary to tax everything susceptible to
taxation. Light and heat are the very
last things which should be sub
ject tostaxation. For similar reasons
inc committee ACKNOWLEDGEMENT lldI thc
tax upon charges for telephone ser
vice to subscrtbeds be eliminated"
Striking out Of all insurance taxes
from the house bill was based upon the
belief that excise taxes upon insurance
is o questionable principle and Should
be subjected to tax only as a last re-
sort"
elimination or reduction Of all OF the
per cent gross sales tax upon many
manufacturers Is defended because
the manufacturers also must pay high
income and excess profits taxes. Your
committee felt" the report said. that
only where the conditions are excep-
tional should such a manufacturers'
gross sales tax be justifable." For
these reasons the house tax on patent
medicines was reduced to per cent.