The Washington herald., 1918-06-12
BILL PROVIDES
EASY PAYMENT
FOR PROFIT:TAX
Revenue Measure Will Also
Remove Inequalities Of
Existing Law.

Excess profit taxes on business will
be very heavy under the new revenue
bill, but in all probability provision
will be made for the payment Of these
taxes IN instaliments so that the bur.
den on invested capital will be in some
measure lightened. A distinction will
be made also between corporations
and copartnerships TO remove any in
equality under the existing law.
Chairman Kitchin made this an
nouncement at the session of the Ways
and Means Committee yesterday after
noon. He said the committee intends
TO give very serious consideration to
some method of installment payments.
He explained that realization Of the
fact that the taxes win be consider
ably higher than under the present
law makes it necessary to equali=e
the burden as far as possible.
A plea for a differentiation between
corporations and copartnerships wa
made by S. c. Pirie, OF Carson. Piric,
Scott & Company. OF Chicago. He
said that the law now in force exacts
from his firm a tax considerably In
excess of what would be paid II II
were organized as a corporation.
War Tax on Pre-war Bahis.
Another plea for special treatment
was made by V. e. Minich, of New
York, manufacturer of sand-mixing
machinery. He explained that his
business had been built up slowly by
continuous investment of personal
funds and that during the last two
years 1t had begun TO yield a profit.
The profit, however, Is in no way
concerned with the war. as the war
has made no appreciable increase in
his business. he said. Under the law,
his tax is applied on the pre-war
basis ana he expressed the opinion
that this was unjust.
The committee evinced a desire to
adjust inequalities OF this kind II It
can be done.
The trials Of Philadelphia lawyer
who has been outwitted by the gov
ernment's revenue-raising law were
brought to the attention of the COM
mittee by Ellis Ames Ballard, general
counsel for the Philadelphia Rapid
Transit Company. History has ac-
corded to the Philadelphia lawyer in
general complete mastery of the In
tricacies Of the law, both oral and
written, but Mr.. Ballard confessed to
the committee he and his associates in
the Transit Company's affairs had
overplayed their shrewdness. as a re-
suit OF which the company win have
to pay as taxes i5o per cent on It's
income over and above the seven per
cent exemption.
TAX ON Invested Capital.
Albert r. Palmer, representing a
number of New York corporations,
opposed the plan of taxing invested
capital, which has been suggested
by Secretary McAdoo as q means Of
reaching corporations which escane
under the pre-war, basis OF fixing
incomes. He said the effect OF such
tax would be to penalize the man
with small amount OF capital and a
large amount of brains as opposed to
the man who simply allows his cap
ital to turn over. He suggested that
the pre-war income and the present
income should be the basis of the
tax.
Chairman Kitchin said IL this rule
were followed the government would
lose at least $1,000, 900, 900 q year
from corporations which have not
made as much since the war as they
did in the pre-war years.
Palmer insisted that a large num-
ber OF companies will go into bank
ruptcy II taxed upon their invested
capital.