The sun., 1918-11-22
Tho Principal Changes.


Senator Simmons told the committee
that 1t was the intention to revise the
revenue bill Immediately, and in sub
stance as follows:
1. Reform the bill so as to raise FOR
the fiscal year 1919, $6.o0o,0o0. 900. and
for the fiscal year 1920. s4.0o0.o0o.00o IN
accordance with the estimate OF the Sec
rotary as to the requirements OF the
Government for these years.
2. Retain In the bill the income, excess
profits and war profits rates In the House
bill. with tho exception Of the 8 per
cent. differential upon the undistributed
earning OF corporations. The elimination
Of the per cent. differentfal to-
gether with other changes made
by the Senate, with reference to
amortization, depletion, &c. would re-
duce the revenue to the Government
from these sources to approximately
$4,000 900, 900 for the fiscal year 1919.
While these taxes will be paid in the
year 1919, they will be based upon the
income and earnings for the calendar
year 1918. These earnings represent
war profits and in the main are In
pocket, and II Is felt that they should
pay the big increases proposed.
3. That the additional 100000, 900
required be raised from the other
sources OF taxation contained in the
pending bill as amended by the Senate.
Third over Present Law.
4. Eliminate altogether the 20 per
cent tax imposed upon the price Of arti-
cles sold in excess Of certain fixed prices.
Retain the Senate amendment as to in
her!tance taxes, retain the other excise
special and miscellaneous taxes provided
In the bill rs amended In the Senate.
which are in the main those of the
House bill.
But where the House bill rate Is in ex-
cess OF the rates Of the present law
change the rates so as to provide rate
averaging about one-third in excess Of
rates imposed in the existing law. In
case new sources of taxation Of this
character are included either In the
House or Senate bill, change the rate so
as to conform to this scheme OF reduc-
ton.
In obtaining this general average Of
one-third Increase over the rates Of the
existing law II is planned that the
range Of increase will run from 70 to
40 per cent. The theory upon which the
Income and profit taxes are differentiated
from the excise, special and miscellane-
fact that In the case OF incomes and ex-
cess profits all the taxes for the present
fiscal year will be levied on income
made during the calendar year 1918.
whereas In the case OF the other taxes
the increases will apply chiefly 10 trans
actions taking place during the calendar
year 1919 or since termination or tho
war conditions.
Cut Income Tax for 1920.
&. That for the year 1920 the reduc-
ton of $4,000, 100000 be accomplished
through the elimination OF the war
profits tax and the reduction Of the
normal Individual incomes and the cor
porat!on income tax to s per cent. and
a reduction Of around 80 Id per cent
from the excess profits tax proposed In
the Senate bin as now drafted.
Some OF the Republican Senators on
the committee are strongly In favor of q
tax on sales to take the place OF some
of the taxes on business which the Ad
plans to retain. The re-
duction OF excess profits tax after next
year, IL the Republicans fail to throw
out altogether the plan for virtually
writing two revenue laws IN one. will be
particularly fought. So also will the
Republicans fight against the high ex-
cess profits rates in the House bill being
retained In the revenue bill In prefer
ence to the modified rates tentatively
adopted by the Finance Committee.
In abolishing the differential on dis
triOuted and undistributed separate in
come the Republicans arc In accord
This was a Kttchin idea
The elimination of so-called 'Tuxury
taxes" putting taxes on necessities for
which more than Nat fixed rate Is
paid, Is welcomed by the Republicans
too