Middletown transcript., 1918-09-07
NEW REVENUE
BILL COMPLETED
The War Measure Will Affect
Everybody.
EARLY PASSAGE EXPECTED
Alternative Plan Arranged To Reach
Excess War Profits-Rates OF
Existing Law Practically
Doubled.

| Washington. - Completing its task
Of framing the $S,o0O,000,00 900 War Rev
enue bill, the House Ways and Means
Committee reported the measure to
the House. It carries greatly increased
income taxes, beginning with normal
tax Of 6 per cent on all below $4,000
year and above the exemption limits.
To reach war profits fiat war prof
its tax of so per cent. is levied with
an alternative plan of excess profits
taxes ranging from IS to 70 per cent.
The maximum surtax on income is
raised to IS per cent. and the normal
tax on all incomes more than $4,000
Is made II per cent.
The bill, which will affect either di-
rectly or indirectly every person and
business concern in the United States,
probably will be taken up in the House
for consideration next Thursday, with
prospects that it can be disposed OF
within a week or 10 days.
Treasury experts have estimated,
Chairman Kitchin stated, that the bill
as finally agreed upon will produce
an annual revenue of between 8,1OO,-
000, 900 and $500, 100000, thus making
the measure by far the greatest rev.
enue producing proposal which Con-
gress has ever been called upon to
enact.
The bill in its final form, Chairman
Kitchin said, is in the main satisfac-
tory both to the Treasury Department
and to the Ways and Means Commit
tee. Secretary McAdoo, he said. had
approved all Of the schedules with the
and the Is per cent. normal income
tax on corporations, with the abate-
ment Of 6 per cent. for distribution Of
profits.
The outstanding features of the COM
pleted bill are:
1t does not impose consumption taxes
or a higher tariff, as it was under
stood that neither would be resorted
to unless all other means of raising
the $4,000, 100000 should fail.
Every person and every business con-
Germ in the United States and every
American portion of income of foreign
corporations operating in the United
States is reached by the provisions of
the bill.
Rates Of existing tax laws in the
main are doubled. A distinctly war
profits tax as an alternative to the
excess profits tax embodied in the pres
ent law is levied The war profits tax
is a fiat 80 per cent. Of the net income
above specific exemption Of $4,000
and deduction Of 10 per cent. of in
vested capital added or withdrawn since
the close Of the prewar period. The
war profits tax is not to exceed IS
per cent. in the case Of corporations
invested capital of which for the tax
able year is not over $4,000 and 40
per cent maximum for concerns of $780,
600 invested capital, in order to pro-
tect small business. The war profits
or excess profits are to be applied alter
natively, according to which will pro-
duce the most revenue. The excess
profits tax is IS per cent. of the net
income up to Is per cent. on invested
capital, so per cent for between Is and
20 per cent on capital and 70 per cent
for net income exceeding 20 per cent
on such capital.
For the first time a luxury excise tax
ranging from 10 per cent on straight
luxuries to 20 per cent. on amounts
paid for variety Of articles in excess
Of specified prices is levied.
All income statutes, including nor
NAL tax of IL per cent. and surfaces
running up to 65 per cent. are codi-
fed.
The bill retains the present income
provisions as for payment of the tax
at the source, exempts the first 81 1000
of annual net income Of single persons
or married persons not living with
their husband or wife and the first
$4,000 Of the annual income of married
persons and embodies most of the pro-
visions Of the present Income Tax law,