Evening journal., 1918-09-07
EXPLAINS s Billion
TAX BILL TO House
Kitchin Defends High Rate
on Incomes by Making
Comparisons
OPPOSES CHANGES
In THE TARIFF

WASHINGTON, Sept. THE genera
vurposes Of the ss,0O0OoOOOo tax bill
were explained to the House yesterday
by Representative Kltchln, chairman o.
the Ways and Means Committee.
Explaining the bill in general, Mr.
Kitchin said the objects OF the commit
tee were threefold. to raise the $780,
100000. TO place the taxes equitahly and
to draw the bin so as TO accomplish
these results and still meet the views OF
the administration and Of the Treasury
Department.
Mr.. kitchin made the prediction today
thaj the annual revenue OF the United
States for many years 10 follow after
the war is ended would never fall be-
low si,000.0O0.O00. Pensions alone, he
said. would be more than si000,O0O,00O
a year.
To this payment must be added the
expense OF running the government and
OF paying the interest on bonds issued
and payments into a sinking fund
with which to discharge bond obliga-
tions
The explanation from Mr.. Kltchln
which the House Is awaiting particular
ly Is in regard to the levying OF excess
profits taxes. This subject Mr., Kitchin
is expected 10 take up in detail today.
AS the excess profit rates in the bill
sre far in excess OF those desired by
the Treasury Department. and the
whole plan is In opposition TO the re-
peaied suggestions Of the administra-
iion. Mr.. Kitehin's explanation Of
what is regarded as his pet project Is
expected to inspire a series OF extreme
ly pertinent questions when that phase
OF the tax bill Is taken up tomorrow.
In order to justify the imposition OF
the largely increased rates on indvid-
ual incomes Mr.. Kitchin quoted the
reports OF the Treasury Department TO
slow the increase in personal incomes
since .9i4. Some incomes had increased
no less than 10000 per cent, he de-
clared. To illustrate he took the in
comes Of three officers OF a pipe manu-
featuring concern shown in the Treas
ury report. These officials OF the par
ticular company had a combined in
come Prior to the war OF a little more
than 5000, while their combined in
come in 1917 was more than s20O0,000.
In order to justify the reduced rates
In the higher brackets OF the income
supertaXes Mr. Kitchin endeavored 10
show just what proportion OF the lar
ger incomes the government would take
under the bin now before the House.
out OF an income Of si,0O0,OO0, he said
the government would take almost
two-thirds - about s6i7,0O0 ~ leaving
s353O00 to the individual. Out OF an
Income OF s5,O0O,0OO, he declared. that
but Si,500,0OO would remain to the in
iividual after paying taxes.
why leave such a wide margin be-
tween the taxes and the actual in
;ome?" asked Representative Moore
lPa)
For three reasons" Mr. Kitchin an
swered. First, men OF such large in
zones do not expend them In their or
binary living expenses. They use them
IN expanding business. Second, II the
lakes are made too high men OF great
Incomes would invest in tax free bonds.
Third, these men would dump their
securities on the market II the taxes
were made oppressive, and this would
unstabilize the market. ! think that
the graduations in this tax are eqult-
able and will work out satisfactorily"
Gives Comparisons in Incomes.
Mr.. kitchin YVES un8ble TO state the
exact number OF men who enjoyed in
comes OF between one and i've million
dollars annually, but said that he knew
their number had increased in the last
year.
To show the increase in incomes gen
orally Mr. Kitehin quoted the following
table comparing compensation in 1914
10 pay in 1871 each item representing