Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-08-06
Chairman Simmons Asserts
Measure Is Drawn on Sci
entific Basis.
RAISES REVENUE WITH
LEAST PUBLIC BURDEN
Flexible Superstructure Permits Fu-
ture Increases-Incomes and
War Profits Pay Most.

The war tax Dill was reported TO the
Senate today as revised by the finance
committee to meet the latest estimates
for war expenditures. It is proposed to
raise $4,000, 6,97o. 900.
The House bill proposed 81 ,s67 ,o0o, 900
in new taxes. No provision for addi-
tional bonds, to be considered later by
the House, are made in the Senate bill
Chairman Simmons plans to call up
the revised bill for debate the latter
part of the week and hopes for its final
enactment by Congress early next
month.
Most of the new taxes proposed un-
der the revised bill for war expenses of
the present fiscal year would come from
incomes, war excess profits, liquor and
tobacco taxes.
The revised Senate bill strikes out the
retroactive tax upon last years incomes,
but principally by increasing surtaxes
on wealthy persons and by doubling the
normal tax on corporations proposes to
raise $777, 900 900 in addition to the $780,
100000 now secured from incomes. 1t
proposes levy of $562, ,0O0, 900 on war
profits and extends the tax to individ-
uals In trade or business, as well as cor
porations.
Yield From Liquor.
The House tax yield on distilled spirits
of $1e0. .000. 900 is raised to s135. 200. 900 i:
that on beer from $37.5o0.000 to $46.-
& 000. 200. and that on wines from $6,000,-
900 to $21, ,o0o, 900. A prohibitive tax on
further manufacture or importation of
distilled beverages also is provided.
The original Senate committee pro-
vision for an increase of Y of / cent
pound in publishers mailing rates
and per cent tax upon their net in
comes over $4,000. In lieu of the House
plan for increasing postal rates by a
zone system, was retained The House
provisions reimposfng Spanish war
stamp taxes were substantially re-
tainod-
The total estimated increase in fed
era1 revenues of $4,000, $40, 900 proposed
under the amended bill was said today
by Chairman Simmons and Treasury
experts to be conservative Many of
those in charge of the revision believe
the bill will. in actual operation, yield
many millions more.
The majority report was submitted by
Chairman Simmons, who explained that
the committees revision of the House
bill was on the principle of raising rev.
enues with the least burden upon the
stitute bill is expected from Senator La
Toilette Senators Gore and Thomas also
plan separate report.
Senator Simmons report stated that a
flexible scientific war tax superstructure
had been constructed by the Senate COM
mittee for the imposition Of war taxes
the largest tax budget in American his
tory-as well as for future tax increases
declared proba BILE
Income war profits liquor and tobacco
tax increases, the majority report point
ed. out, from the nucleus of the revised
bill
Chairman's Statement.
In a general statement for the COM
mittee. Senator Simmons said:
TT has at all stages acted with a
keen sense of the extreme Importance
of its action in it's effect upon the coun-
try and the successful prosecution of
the war. Nor was it unmindfu1 that
those who will have to pay these exac-
tions will also have to furnish the
larger part of the money to purchase
the bonds for expenditures not provid-
ed for by taxation, and also as we may
be called upon to loan to foreign gov
ernments engaged with us in war
against Germany
Your committee was profoundly i'm
pressed with the expediency and neces-
sity of broadening and developing our
system of special taxation, so as to pre-
sent a scientific scheme. logically con-
structed: to provide a superstructure
sufficiently strong and flexible to meet
not only our present, but our future
war needs, and so adjusted as to dis
tribute equitably the necessary burdens
of taxation and safeguard the activities
of the nation by imposing no tax which
would not leave the taxpayer a reason
ably compensatory return from his in
vestment.
The basis of the system proposed by
your committee is the income and war
profits taxes, internal revenue taxes
upon whisky and tobacco. and certain
moderate subsidiary levies in the ma
ture of excise taxes. The system pre-
sented is in form much the same as
that In the House, but ii has, il is be-
lieved, been systematized, co-ordinated
and made more consistent.
Incomes and War Profits.
= '.As the result of these changes il is
estimated that about two-thirds of the
additional revenue expected will come
from the income and war profits taxes
In liking the rates upon incomes and
excess pronts your committee kept con-
stantly In mind the fact that the
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
islatiye purpose. Moreover, il Thought
that II the rates upon incomes and ex-
cess profits were fixed at the higbes,
level there might be but little margin
left for further increases in rates"
Eleventh Hour Changes.
Commenting on eleventh hour chang.
es made by the committee in recently
increasing the bills tax leyies, afte,
Secretary McAdoo submitted the new
war estimates, the report stated:
Your committee decided that tht
war profits tax should not apply in tho
case of an individual except to profit.
in excess of $1,000. This difference
Follows the principle of the income
tax law"
Defending the new plan of taxing
war profits, the report said:
The House bill would impose tax
of 16 per cent on excess profits. Great
Britain's war profits are now taxec
so per cent, Canadas increased from 2S
to rs per cent and the New Zealand
rate is As per cent The committee
proposes. instead of an excess profits
tax. a war profits tax The change OF
basis seems desirable, not only because
it Is equitable, but because its success.
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