The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-08-06
WRANGLING HALTS
WAR PROFIT TAKES
Treasury Department and
Ways and Means Committee
in Open Disagreement.
BRITISH PLAN OPPOSED
Exact Duplication Of English
Method Urged by Nc
AdoO's Assistant.
Srscia, peApnteA TO TEE sus.

Specia, DespoteA TO TEE Sun.
WARRINGTON. Aug. S.-The row which
has been smouiderins between the Treas
ury Department and the Ways ana
Means Committee over the proper
method Of taxing war profits broke out
nnally to-day. Il. c. Lefnnswsll. As
sistant Secretary OF the Treasury. was
before the committee for more than four
hours trying to obtain tho consent OF
the COMMITTEES majority to the irnposi-
ton Of an 80 per cent. tax on purely war
profits instead OF the excess profts taxes
tentatively agreed upon by the commit
tee.
The Treasury demands an exact dupli-
cation Of the British war profts tax i'm
posing an so per cent. tax on the dr.
ference between the profits made prior
to the war and the average profts made
since the beginning OF t.
The Ways and Means Committee is
lighting for retention OF the scale OF
excess profits taxes which II has ten
tatively agreed upon. This scale i'm
poses a tax of IS per cent. on net In
come in excess Of Is per cent. and not
In excess Of 20 per cent Of the invested
capitdl, so per cent. on net income be-
tween 20 per cent and IS per cent
of the invested capital and 80 per cent.
on all net income above Is per cent. OF
the invested capital.
when the committee decided tenta-
lively upon the excess profits tax rates
Chairman Kitchin said to-day ut did
10 on the understanding that It was not
ANAL and we expected to have Secre-
tary OF the Treasury McAdoo before the
committee to-day to hear his views. He
failed to return to washington to-day.
though. and Mr. Leffinswell appeared
in his stead"
Kitchin Opposed Treasury Scheme.
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.. Kitohin, whereby
either the excess profits tax or the war
profits tax could be levied"
In reply to questions the chairman
said the committee did not favor the
superimpossd war profits tax In addition
to the excess pryfitB levy.
II tho war FRONTS tax ID finally
written into the bill. other members Of
the committee said, It will b In de-
rance OF the viii OF the majority Of
the comm,ttss. while Mr.. Kitohin would
say nothing Of his own views to-day.
a. recently a. FRIDAY he declared the
tentative scale Of excess profits tax
was ample to taxa the dig PROFITS Of the
war prohteer and turn them into the
Government. funds and that war profits
tax was unnecessary. 1t was learned
from committee members that Mr..
Kitchin fought hard to-day against the
Treasury scheme, although the Treasury
plan 10 understood to have the backing
Of the White House.
Republicans OF the committee for the
most part strongly favored the excess
profits plan already tentatively adopted.
Industries where two companies con-
troll viii show absolutely no so-called
war profits. they pointed out. because
their profits prior to the war and since
have been about tho same. Some com
panies having enormous profits would
not be touched under the Administration
plan. Mr.. Kitchin has estimated that
s500.o00.o00 in excess profits would es-
cape taxation under the Treasury plan.
Compromise Plan Favored.
conclusion on the two taxes being con-
tended for. but II was indicated to-day
that the solution would be a compromise
whereby the plan of retaining the excess
profits rates and embodying the war
profits tax also would be adopted. I'm
der this plan the excess profits tax
would apply except under circumstances
where the suggested war profits tax
would raise more money. However. it
Is safe to say that very bitter opposition
In the Ways and Means Committee must
FIRST be overcome or overridden.
One important change was made to-
day in the first draft of the bill. On
motion of Representative Moore (Pa)
the schedule of supertaxes on individual
incomes was changed in the Ave highest
brackets to impose greater tax: These
rates OF supertaxes now are to be:
On portions Of incomes between $780,
600 and $500. 900 SIS per cent
Between 100000 and $780, 900 so per
cent
Between 100000 and $1,000, 900 SIS
per cent
Between $1,000. 900 and $4,000 900 10
per cent.
In excess Of $1,000. 900 rs per cent.
These rates as tentatively adopted by
the committee had each been per cent.
lower than the rates agreed upon to-day.
Take Up Alien Properties.
The committee also had under discus
sion TO day the taxes on alien property
The principal point was whether Gus
todian Palmer should make returns on
the allen 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 partial
report from the committee of three
appointed TO investigate the question OF
luxurytaxes and report to the full COM
mit:ee to-day.
report was made but 1t was only
. partial one to the effect that a gen
eral policy of imposing fiat tax on
the price of certain articles snould be
adopted with the addition of imposing
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 tho sub
committee to make a full report recon-
me nding the articles to be taxed and
n hn Iaa