Arizona republican., 1917-08-07

ing revenues with the least burden up on the public A substitute report with a substitute bill is expected from Sen atOr LaFollette. Senators Gore and Thomas also plan a separate report.
 Senator Simmons report stated that flexible scientific war tax superstruc- ture had been constructed by the sen ate committee for the imposition of W ar taXes-the largest tax budget in Amer ican hiStorY-aS well as for future tax increases deciared probable.
 Income, war profits, liquor and to- bacco tax increases, the ma aiority re- port pointed out form the nusleus iof the revised bill.
 in general statement for the com mittee. Senator Simmons said
 Tt has at all stages acted with a keen sense of the extreme importance of it's action in its effect upon the cOun- try and the successful prosecution of the war. Nor was it unmindful that those who will have to pay these exac- tions will also have to furnish the lars- CT part of the money to purchase the bonds for expenditures not provided for by taxation and also as we may be called upon to loan to foreign govern ments engaged with us in war against Germany.
 Your committee was profoundly i'm pressed With the eXpediency and ne cessity of broadening and developing our system Of special taxation so as to present a scientific scheme, logically constructed to provide a superstruc ture sufficiently strong and flexible to meet not only our present, but our tu- i ture war needs, and so adjusted as to distribute equitably the necessary bur dens of taxation and safeguard the ac- l tiVities of the nation by imposing no tax which would not leave the tax payer reaSonab:e compensatory return from his investment
 "The basis of the system proposed by your committee is the income and war profits taxes, internal revenue taxes upon whiskey and tobacco, and cer- i tain moderate subsidiary leVies in the 1 nature of excise taxes. The system | presented is in form much the same as that in the house, but it has, 1t is i believed, been SystematiZed, co-ordinat | ed and made more consistent. As the result of these changes, it is estimated that about two-thirds of the additional revenue expected will come i from the income and war profits taxes. ] In fixing the rates hfon incomes and excess profits your committee kept constantly 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 islative purpose Moreover, it thought that if the rates upon incomes and eX- 1 cess profits were fixed at the highest level, there might be but little margin left for further increases in rates
 The report defends the elimination of the so-called Lenroot sur-taXes on in- comes of over $40,000 added in the house, designed to raise $66, ,000, 900 as follows:
 ''In view of the fact that in addition to the large increase in the normal tax and surtaxes upon incomes, the bil provides for large increase in the wal profits tax of corDorations and part nerships and includes individuals in the l scope of that tax. and in view of the probabi ity that it will be necessary hereafter to further increase these rates | in order to provide for increased wal expenditures, your committee believes that for the present, it is inadvisable to increase the surtaX rates beyond those proposed in the original house biu'
 Regarding. the elimination of the house retroactive income taxes on 191t i incomes, which would have produced $leS 900, 900, the report stated:
 This tax seemed in principle botf morally and economically unsound. In comes of the last year have paid theil taxes and the balance has either beer spent or saved and added to capital, ir which form it will yield returns in the ensuing years To tax this ax-paiC income again is not only double taxa ton of peculiarly nopious kind, but would possibly compel taxpayer to impair his capital and thus diminish government sources or taxation. II would be one of those disturbing taxes
 which would alarm business and chect ihhustriai productivity. It is very pool
 economy and would hold out a threa
 of uncertainty
 In recommending the graduated wal
 profits tax upon individuals as well a! corporations in lieu of the present eight per cent excess profits law, the