New-York tribune., 1918-12-10
Majority Report on Revenue
Bill Favors Action Now
on Two-Year Programme
Business Needs Help
Eighty Per Cent Levy in
Peace Time Would Be
Positive Evil, 1t Is Said
Ne,c York Tribune
WdShirqton Bureau

time an GU per cent prOntS tax would
be positive evil without excuse, says
the majority report on the Kitchin
revenue bill made public o-day by
Senator Simmons. chairman of the Sem
ate Finance Committee, in advance Of
its presentation tomorrow.
This statement was made in explain
ing why the majority of the committee
decided taxes to be collected in 1920
should be fixed new. During the re
construction period, the report said,
business was entitled to go Forward
without this burden.
Mr.. Simmons will call up the revenue
hill for consideration tomorrow and
will make the cpening speech at once.
The plan of procedure will be to let
general debate run as the Senators
may be moved to talk, but whenever
nobody is ready with speech the com
mittee amendments will be taken up
in order. Altogether an effort will be
made to get the Senate to display more
energy and concentration than is its
habit in considering important meas
ures.
The minority report will be given out
tomorrow and Senator La Toilette eX
poets to have report of his ewn
Defends Programme
The majority report defends the
tWo-year programme of taxation which
has aroused Republican opposition and
discusses the general ard particular
differences between the House bill and
the Senate amendments. The report
points out in the beginning that where
as the House bill was framed in the
expectation of raising S1,137 100000
from the beverage taxes in the first
year of their operation and $3.50, ,OOO,-
600 for the fiscal year of 1918 49, the
adoption OF regulations and restric-
tions on the manufacture and sale of
alcoholic beverages has so changed the
situation that the beverage taxes will
Weld but 50,0O0,O 900 for the current
fiscal year and only $4,000, 600 for the
following fiscal year.
Then, having nearly finished its
labors, the committee found itself con-
fronted by a new situation brought
about by the sudden termination of
hostilities. The task of financing the
operations of great war" the report
says. gave way to the task of fnanc-
ing the government through q period
OF reconstruction and demobilzation.
The two problems are not the same
and the tax legislation appropriate to
the one is not wholly appropriate to
the other. Taxes which will be easily
borne amid the feverish activity and
patriotic fervor of war times are
neither so welcome nor so easily sus-
tanned amid the uncertainties, the de
preciating inventories and the falling
\ markets which are apt to mark the
I approach of reace.
Repressive Taxes Must Cease
"Repressive taxes which in time of
l war are justified for the very reason
| that they diminish the demand for
| labor. capital and raw material are
for the very same reason obnoxious
| and undesirable in times of peace
| THE cessation of war, therefore,
brought with it not only the oppor
tunity but the necessity of reducing
the large tax budget which the House
had voted"
This Interpretation of the financial
significance of the cessation of war
was promptly confirmed in a letter
addressed by the Secretary of the
mittee under date of November Ia,
1918, in which Secretary McAdoo an
nounced that "the collapse of our
enemies necessitates instant reconsid-
Grafton of the financial plans before
TIE government" and urged enactment
OF revenue bill with view to yield
irg 600O,0O0000. payable during the
calendar year 1919, and not less than
S4O00,000, 900 during the calendar year
1920
| The report then proceeds to a re
l the s6,000,00O,oOO tax for 1913 to S4,-
OOO,0O0000 for 1919, and the details
Of The committees amendments to the
4 House bill
\ Discussing taxation for the fiscal
year 1919-1e20, the report says that
q the committee was of the opinion that
provision should be made in the pres
ent bill for the termination after 1919,
Of the war profits tax and for the re-
duction of the eXcess profits tax.
The country" it says, 'has the
4 right to know how soon and in what
degree the burden of war taxes can
prudently be reduced During this pc
Rod of reconstruction, however. bust
ness particularly new business) is en-
titled to go forward without the
burden of an 80 per cent tax upon
l profits.
For the year 1920, therefore, the
committee recommends that the war
profits tax or bracket be abolished,
that the rates OF the excess profits tax
De substantially lowered, and the rate
of normal tax be reduced by one-third
i. e., IN the case OF corporations from
10 per cent to per cent and in case of
individuals from 12 and 6 per cent to 8
and per cent.
at is estimated that these changes
would reduce the revenue for 1920, as
| compared with 1919, by approximately
l Sl,400000,0 900. and t. at there would be
net reduction from other miscel-
aneous sources of about $500, 100000,
attributable chiefly to shrinkage in the
yield of the beverage taxes. With re-
spect % taxes other than income and
profits taxes, the committee recon-
mends no change in rates for the fiscal
Hyear 1920.
Incomes md Profits to Pay
The main outline OF the programme
Hproposed by the committee thus be-
comes clear. For the fiscal year 1919
1t is planned to raise nearly $4,000, ,000,-
600 from income and profits taxes, and
something like 81 400 000.0 900 from other
sources; for the fiscal year 1920 it is
Epanned to raise somewhat less than
$4,000, 100000 from income and profits
taxes. and about $1,000, 100000 from
/ ether sources.
About the general wisdom of such
Ia programme we entertain no serious
doubt. 1t is imperative that profits
and income for the year 1918 be heav-
lily taxed. This is not only necessary,
but it is equitable and in accordance
HWifb