New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-25
Finance Committee Throws
Out Section Making Tax
on Incomes Retroactive
Second Class Mail
Increase Dropped
Methods Of Levying on Ex-
cess Profits Changed
Slashing Only Begun
Hmm III, Tribune Burcaui

Washington, May 24.-Virtually
agreeing to raise only one and quar-
ter billions Of dollars by the new reve-
nue. bill, instead of nearly two billions,
as planned in the measure passed by
the House yesterday. the Senate
Finance Committee to-day made three
slashing changes in the bill. as fol-
lows:
/. The retroactive income tax, i'm
posing an additional SO I-3 per cent
on the income taxes for the calendar
year of 1916 (the tex which is paid
before June 80, 1910. was stricken
from the bill This wiped out an esti-
mated revenue Of 100000.
.. The increase in second class
mail rates was stricken out.
3. The excess profits tax was
changed from the present system OF
taxing all profits in excess of per
cent to the British system Of taxing
all profits in excess Of the average
profits before the war. The pre-war
profits will be determined either by
the three years or the five years prior
TO the war The English use the
three-year basis. It is probable that
the tax on these "excess profits" will
be at the same rate the House pro-
posed to be levied on profits in ex-
cess Of per cent, or 16 per cent.
To Tax All Advertising
In lieu of the increase In second class
mail rates the Senate committee agreed
to impose tax on all advertising,
whether in newspapers, magazines, bill
boards, streetcars or anywhere else.
Nc agreement was reached in commit
tee as to the amount of this tax. but
members tonight expected that 1t
would be about per cent.
The committee members seemed to
think that they had just begun to make
changes IN the House bill. The meas
ure i. not yet formally before the COM
mittee, since the brief session OF the
Senate to-day did not permit the bill
10 be brought over from the House and
be formally referred TO the Finance
Committee. However, the text Of the
measure was before the committee.
which enabled il to decide on amend.
ments.
The announcement by Chairman
Kitchin. of the House Ways and
Means Committee. IN the House yester-
day. that the President heartily ap-
proved the revenue bill. and did not
desire it changed. caused no surprise
in the Senate. and no attention was
paid to it. The Finance Committee
began throwing most of the bill into
the wastebasket and rewriting the dis
carded sections just as had been pre-
dicted in The Tribune, ignoring the
suggestion that maybe the President
liked the present text.
Case of Tariff Bill Cited
Senators TO-DAY pointed out that the
President was quoted Immediately
after the passage of the Underwood
tariff bill by the House as indorsing
every letter in that measure. After
the Senate had made several hundred
amendments, however, the President
aid not seem displeased, and has been
pointing with pride to the bill ever
since. -,
Senator's also pointed out that Mr.
Wilson had heartily indorsed the
Glass Currency bill after it passed the
House. but that the Senate had
adopted hundreds OF amendments 70
the measure. and the President ap-
nroved the measure and spoke highly
of it afterward.
The committee is considering a tax
upon parcel post packages smaller
than that OF express shipments. a
parcel post tax. Senators say. should
be considered freight rather than
postal tex. In deciding to strike out
The second class postage zone increase
the committee believed this 20 be
more a matter Of postal administrs-
ton than Of taxation.
Further changes in the inheritance,
tariff. freight, passenger and liquor
taxes also are being considerd By the
Professor Taussig, chair
man of rhe Tariff Commission, dis
cussed the 10 per cent additional tariff
Ievv to-day with the committee. recon-
mending changes 10 equalize alleged
in the House provisions.
Some articles placed on the free list by
the House. IL is expected. VIII De maze
taxable By the Senate Committee ana
others now subject 10 the extra lO per
cent customs levy made free OF duty.
House Against Heavy Taxation
Probably the most important action
.o-dav was the decision not 20 raise
The full 80 per cent Of the wars cost
oach wear py taxation. IL is virtually
certain that the bill as il will finally
he enacted will not provide for the
ra;sing OF more than one and q quarter
hillions. and il is far more likely 10 be
a little less.
The real feeling Of the House is
sosins, raising one-half the war ex-
nsr ditures by taxation which might
4 ,hyottle business. A large contingent
~ ho,h houses believe that IL such
heavy Ievics are made this year busi-
nos. may be so depressed and profits
.o reduced next year that 1t viii be
d;H;cult 10 raise the amount OF money
d.s;red either bv bonds or taxation.
Republican Leader Mann voiced this
.sntiment when he declared the House
bill would "kill the goose that laid the
The House passed the bill yesterday
oot because it approved the measure
,hs. rad been submitted, but because
X was frankly and openly passing the
loo of redrafting the bill along TO the
Senate.
Completion Of the Senate commit
..c,. redrsft.ng work within . week
Or possibly ten days. TO be followed
bv Immediate consideration Of the bill