Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-07-27
Higher Tax on
Undivided Profits
May BE- Approved

Washinstons July. PIN conformity
with Its announced purpose Of raising
$4,000, 100000 Of the $4,000, 0oo, 900 need
ed revenues from war profits and in
comes. the ways and means committee
decided tentatively there should be an
INCOME tax OF Is per cent on net in
come of corporations, instead Of 6 per
cent. as under the present law.
This proposed tEx is reduced to IL
per cent on the ap,ount of profits dis
tributed to shareholders, but undistrib-
uted profits will b., subject to tax OF
Is per~cent If the views expressed are
adopted finally. 1T Is estimated that
about $60(,000.0 900 Is obtained from the
corporation income taxes. and over ST.
250.000,00C, II is estimated, would be
obtained Under thu, 10 per cent tax.
Many Business men hive advised that
there shouldgbe q difference in the
taxes, that corporations which prompt
ly divide their profits with theiA share-
holders should not be taxed 80 heavily
as those which retain the profits al
surplus. It is expected that the pro-
posed tas: will be opposed strenuously,
and there Is little hope that the senate
q heavy lax on business.
While radical members Of the COM
mittee. flcinE the necessity Of getting
80 per cent Of the revenues from big
buHness Or imposing direct consump-
ton tax. suggested corporation tax
of 20 per cent. the belief is that the
committee will agree finally upon a
tax of is per cent. Indications are
that the normal income tax will BE fixed
at ~ per cent. instead of 4, as at pres
ent.
means committee. issued this statement
reviewing the days work Of the cem-
mittee: -
.The committee had under discussion
today the income tax on corporations,
discussing practically all day the rates.
The following rates were suggested
and discussed:
"(D Twenty per cent on the net in
come Of corporations, with a provision
that on the amount distributed to
shareholders only 10 per cent should be
levied.
"(2) Eighteen l,er cent on the net in
come Of corporations, with a provision
that on the amount distributed to
shareholders onl, II per cent should be
levied.
The ':oll1owins; rates, were also sus-
"d) A. fiat rate OF IL per cent on the
net income; ands&
: "(2) 4 fate rate or12 per cent >on
the net Income,
while no definite decision was
reached 1T seemed that a majority Of
the committee favored the proposition
of the Is per cent rate. on net income
with tfsej reduction to IL per cent on
the amount distributed to sharehold-
ers." ~
Chairman Kit,hin said that the war
revenuss bilkSwould be completed and
reported to the house by the last week
of August. and would be voted upon
finally early in September. provided the
president did not insist that the pend :,
ing water power bill be passed first
The water power bill now has right Of
way In the house. The plans of the
leaders are to ieconvene the house on
Avg. 10 and allow one week for the
consideration OF the water power bill.
By Aug. 26 or AZ, Mr.. sKitchin believes,
the house will have disposed of the
water power bill and will be free to de-
vote itself entirely to the revenue bill.
Mr. 1Sitchin said that the house would
do everything 20 expedite the passage
Of the revenue bill. He said that If
congress did not act upon the measure
finally before the congressional cleo
tions, the fault would not lie with him
or the house. Republicans in the house
are now saying that the revenue bill
will not be voted upon in the senate
before the November elections.