The Watertown news. [volume] (Watertown, Wis.) 1917-1919, 1917-10-03
BIG WAR TAX BILL
WINS IN SENATE:
TO WILSON TODAY
$2,70O,OOO,OOO Revenue Meas
ure Will Be Signed by the
President at Once.
WILL BECOME LAW TONIGHT
Senator La Toilette Cast the Only Dis
senting Vote Against Bill, But Of
fered No Objection to
Its Passage.

Washington, Oct 3.-The $2,7000O0,-
600 war revenue bill passed the senate
late yesterday with the only announced
dissenting vote coming from Senator
La Toilette, although the senator did
not seek roll call on the measure and
offered no objection to it's passage.
The bill will be in the hands of
President Wilson this afternoon. 1t
was engrossed an hour after it had
passed the senate. At noon today it
will be signed by Speaker Clark and
Vice President Marshall. 1t becomes
a law when approved by the president.
Every professional man in the Unit
ed States will be subject to the excess
profits tax in the war revenue bill, if
his income is more than $4,000 a year !;
this in excess of all existing taxes
and proposed income taxes which will
be effective when the war tax becomes
a law
Simmons Explains.
Senator Simmons explained why the
cOnferees had reached agreement
through compromises and spoke in
justification of the newspaper and
magazines taxes, against which there
had been a protest. He had inserted
In the record a long letter from Post
master General BurlesOn defending the
taxes as carried in the BILL
Senator Simmons made the state
ment that recapitulations of estimated
revenues to be derived from the bill
showed it would yield about $2O0,OOO,-
600 less than was originally estimated.
The losses would come from overesti-
nations of the yields from the income
and war profits taxes largely, but, he
asserted, the bill was the most equit-
able and evenly distributed burden
bearer that could be drawn. Senator
Smoot of Utah, Republican leader, de-
Tended the bill as fair and impartial
measure.
Fordney's Figures.
Representative Fordney of Michigan,
an expert on the tariff, explained by
figures how the bill would operate on
the three forms of business organiza-
ton, corporations, partnerships and in
dividualS.
In addition to showing how far into
incomes and profits the bill will reach,
Mr.. Fordney's tables indicate that the
task of figuring corporation, partner
ship and individual taxes will be a
gigantic one, and that an enormous
amount of detail work will be exacted
from both the treasury officials and
the accountants of business houses.
Representative Fordney gave to each
of his three forms of business a cap
ital of 100000 and an income of S5O,-
600. In the partnership he allowed
three partners, who would be assessed
for individual taxes as we'll as stand
ing the excess profits tax upon their
80 per cent return on the 100000 cap
ital.
His table, which follows, shows the
total amount of income, corporation
and excess profit taxes that would
be paid (a) by a corporation with a
capital of 100000 and net income
of $4,000; (b) by a partnership Of
three parties with a capital of $780,
900 and net income of $4,000: (c)
by an individual engaged in business
with 100000 capital and $4,000 of
net profits.
(A) Corporation with capital of $780,
600 and net income of $4,000. De-
Quoting from net income 8 per cent
of the capital, the maximum deduc-
ton, plus $4,000, a total deduction of
$4,000 shows the taxable income to be
S39OOO.
Tax on amount in excess of deduc-
ton and not over 10 per cent of capi-
tai, $1,000 at 20 per cent-$60O.
Tax on amount of profit in excess of
Is per cent of capital and not over
20 per cent, $1,000 at % per cent
$3.50.
Tax on amount in excess of 90 per
cent of capital and not over % per
cent, $1,000 at 80 per cent-$1,750
Tax on amount in excess of % per
tai. $4,000 at 40 per cent-$3, 600.
Tax on amount in excess of 33 per
cent of capital, $4,000 at 60 per cent
$4,000.
Total excess profits taxes-$17, 400.
Net income-S500OO.
Excess profits tax-S17, 400.
Net subject to income tax, S32, 600
at per cent-$1, ,956.
Total tax-$19,356
Partnership Tax
(B) A partnership of three parties
with capital of 100000 and net in.
come of $4,000.
Deducting from net income per
cent of capital invested plus. $4,000.