Evening journal., 1918-08-06
WRANGLING HALTS
WAR PROFIT TAXES
Treasury Department and
Ways and Means Com
: mittee in Disagreement
BRITISH PLAN
FOR U.sS. OPPOSED


WASHINGTON. Aug. 6-The row
which has been smoldering between
the Treasury Department and the Ways
and Means Committee over the proper
method Of taxing war profits broke out
nnslly yesterday. R. c. LefIlngwel. As
sistsnt Secretary Of the Treasury, was
before the committee to Obtain the
consent Of the committee majority to
the imposition Of an so per cent. tax on
purely war profits instead Of the excess
profits taxes tentatively agreed upon
by ihe committee
The treasury demands an exact du-
plicatlon Of the British war pronts tax
imposing an so per cent. tax on the diff
ference between the profits made prior
to the war and the average profits made
since the beginning Of IL.
The Ways and Means Committee is
fghting for retention Of the scale OF
excess profits taxes~Nhich IL has ten
tatively agreed upon. This scale i'm
poses q tax OF 30 per cent on net in
come in excess Of 10 per cent. and not
in excess Of 90 per cent. Of the invested
capital, 80 per cent. on net income be-
tween 90 per cent and 25 per cent
OF the invested capital and 80 per cent.
on all net income above % per cent. Of
the invested capital
"When the committee decided tenta-
lively upon the excess profits tax rates
Chairman Kitchin said today "it aid
so on the understanding that It was
not final and we expected to have Sec |
retary OF the Treasury McAdoo before |
the committee today to hear his views.
He failed TO return TO Washington to- /
day, though, and Mr.. Leflngwell ap-
peared in his stead.
Mr.. Kitchin then explained that the
Treasury Department favored the war
profits system in place Of the excess
profits taxes
"A majority Of the members Of the
committee apparently favor an alterna-
tive plan" said Mr. Kitchin. whereby
either the excess profits tax or the war
profits tax could be levied"
In reply 10 questions the chairman
said the committee did not favor the
superlmposed war profits tax In addi-
ton 70 the excess profits levy
II the war profits taxes is finally
NIlIItn llIN llAt llAlA NAAA't AAAN4AAAe--' r~
the COMMITTEES said lt win be in de-
nance Of the will OF the majority Of
the committee. While Mr.. Kitchin |
would say nothing Of his own views
as recently as Friday he declared the |
tentative scale Of excess profits tax
was ample 10 take the big profits OF
the war profteer and then turn them
into the government funds and that a
II WA
learned from committee members that
Mr. Kitchin fought hard against the
treasury scheme, although the treas
ury plan Is understood 10 have the
packing Of the White House.
Republicans Of the committee for the
most part strongly favored the excess
profits plan already tentatively adopt
ed. Industries where two companies
control VIII show absolutely no So
called war profits, they pointed out, be- |
cause their profits prior TO the war and
stfce save been about the same. Some
-fompanies having enormous profits
would not be touched under the ad-
ministration plan. Mr.. Kitchin has es-
thnated that S50O,OOOO0O in excess pro
fts would escape taxation under the
treasury plan.
!
iie conclusion on the two taxes being
contended for. but It was indicated that
she solution would be a compromise
whereby the plan Of retaining the eX-
cess profts rates and embOdying the
war nronts tax also would be adopted.
Under This plan the excess profts tax
would apply except under circumstances
where the suggested war profits tax
InKNnNnr IL
is safe 10 say that very bitter opposi-
t,on IN the WAYS and Means Committee
must first be overcome or overridden.
One inportant change was made to-
dav In the arst draft Of the bill. on
motion Of Representative Moore PA
rhe schedule Of supertaXes on individ-
mai income was changed in the five
highest brackets to impose a greater
tax. These rates Of supertaxes now are
to be:
On portions Of incomes between $780,
600 and $4,000, 50 per cent.
Between $4,000 and S5OOooo' 60 per
cent.
T Between 100000 and s5,OOOOOO 70
per cent.
IN excess el coiulusoNNf 80 lV4 SNHt.
The rates as tentatively adopted by
the COMMITTEES had each been 3 per cent.
lower than the rates agreed upon to
day.
The committee also had under discus
sion the taxes on alien property. The
nrinoipal point was whether Gus
fodisn Palmer should make returns on
the alien properties and alien business
under his control The question was
not disposed Of, the committee deciding
TO hear Mr.. Palmer within few days
and ascertain his views.
The committee also heard a partial
report from the subcommittee Of three
appointed to investigate the question
of luxury taxes and report 10 the full
committee.
A report was made but IL was only
partial one to the effect that a gen.
eral policy Of imposing a nat tax on |
the price Of certain articles should be
adopted with the addition Of imposing /
a tax on the portion Of the prices Of
certain standard articles where the high
cost would put the articles in the lux
ury class.
The committee instructed the sub
committee 70 make a fun report recon-
mending the articles TO be taxed and
the rates 10 be applied. Not even ten
tatiye rates have been adopted by the
/. subcommittee.