New-York tribune., 1918-08-01
Tariff Fixed at $40 to $50
on Cars Costing $500
to $4,000
Two-Cent Irnpost on
Gasolene Proposed
Revenue Bill Trainers Plan
Additional Levy 'on
Heavy Profits

WASHINGTON, July 31.-A Federal
graduated excise tax on the use of au-
tomobiles, running from $40 year on
cars originally rctailed at not exceed
ing $500, to $50 tax on $4,000 cars
and $40 additional for each $500 above
$4,000, was agreed to to-day by the
House Ways and Means Committee,
which is framing the new $S,000,000, 900
revenue bill.
The tax applies directly to the own
ers, while the tax of 10 per cent on
gross sales of automobiles and 5 per
cent on gross sales Of auto trucks,
agreed to yesterday, applies to the
manufacturers, producers and import
ers of cars. The tax on use of cars is
based on the original retail list price
of the cars, regai dless of the year Of
manufacture.
The committee also agreed to a tax
of two cents per gallon on the produc-
tion Of gasolene and Federal excise
tax of $5 81 year on the use of motor
stated that, while the manufacturers
tax and the owners tax are differ
entiated, it is generally believed the
owners ultimately will have TO pay all
the tax, the manufacturers passing on
the tax in increased prices. The auto
mobile and motorcycle excise tax is
expected to yield approximately s125,-
100000 and the gaso1ene tax $45,o00,0 600.
Heavier Profits Taxes
War profiteering was the subject Of
a prolonged discussion to-day, with
technical calculations as to the COM
parative yields of various revenue
plans. There was a disposition ulti-
mately to agree on some additional
form of tax to reach large corpora
tions making heavy profits that might
not be taxed sufficiently under the
excess profits and corporation income
tax rates.
Chairman Kitchin late to-day issued
this statement.
"We took up the luxury taxes to-day,
We put tax of SIS a year on motor
cycles. On automobiles, on the original
retaii listed sale price, whether they
were produced in 1918, 1917, or any
other year. we put tax beginning with
$40 year on cars originally listed
at not exceeding $500. 1t is immaterial
when the user got the car or how old
It is. This is Federal excise tax on
the use of cars. On cars above $500
and not exceeding $3.50, the tax would
be SIS; from $3.50 to $1,000. tax of
$50; for every $500 more up to the
original price of s3,000 an additional
tax of $40, and for each further $500
above the $4,000 class an additional
tax of $40. All this will bring m not
less than S125 100000 revenue Trucks
are included in this classification ten
tatively. They can do as much damage
to the roads.
S45,00G,000 From Gaso!ene
I'VE put two cents gallon tax on the
producer, or manufacturer of gasolene,
which would yield approximately S45,-
100000. The committee passed over
the subject of war profits"
Mr.. Kitchin explained that while war
prohts as separate proposition were
passed over, the excess profits schedule
includes war profits. He said the ex-
cess profits tax will reach the corpora
tions making large profits both before
ana after the beginning of the Euro
2ean war, and under that schedule con-
Germs making 100 per cent profits on
invested capital turned over heavy rev
enue to the government after the regu-
lar deductions had been made.
Some members of the committee are
said to favor the separate tax on war
pronts. The Treasury Department has
suggested plan under which the ex-
cess profits or an alternative war
profits tax would be applied according
as the Treasury found the largest rev.
enue was likely from the individual
concern. Representative Green. of
Iowa, member of the committee. has
proposed !evying tax on the differ
ence between the profits of the taxable
year and the average of the net profits
for 1911, 1912 and 1913. The rate Of
this tax probably would be 10 or 20
per cent, depending on the Treasury
needs and the amount Of revenue from
other parts of the bill.
Allege Discrimination
Opponents of the alternative plan
contended that it would operate dis
criminatively between corporations
making the same profits, while spon-
sors of the superimposed war profits
tax pointed out that every dollar un-
der it would be additional revenue to
that brought in under the excess prof
Its and corporation income schedules.
MIR. Kitchin announced to day that
there were $50 many thousands of
suggestions" as to the Injuries taxes
that it had been decided to create a
subcommittee to consider them and
report. with recommendations. next
Saturday. Representatives Hull. of
Tennessee, and Helvcring, of Kansas,
Democrats, and Moore, Of Pennsylva-
MIA, Republican, were named on this
committee.