New-York tribune., 1918-08-09
Revenue Bill Trainers to
Submit Both Graduated
and Flat Levies
Lighter 1mposts on
Autos Agreed Upon
Easier Tobacco Schedule
Drafted; Expected to
Increase Returns
By Theodore Nj. Knappen


sary to wire him from Chicago urging
a fiat war profits tax. The chairman
admitted that outside Of some excel
lent publicity for Mr.. McAdoo he
could see no reason for the telegram,
since a war profits tax, in addition to
an excess profits tax. had been deter
mined on some ten days ago by the
committee in conference with Treas
urv officials, although at that time not
made public.
The chairman was quite good
natured about the matter, but said
that if he had interpreted the McAdoo
telegram as a slap at himself he would
have denounced" Mr.. McAdoo. On
the contrary, Mr. kitchin was quite
certain that the Secretary of the
Treasury, the Treasury Department
experts and the committee would, after
some further consideration, harmon
lously agree on a combination of
methods of taxing war profits.
The fact is that there is a good deal
Of talk in and out of the committee
now that is little more than the diff
ference between tweedledee and
twee edledum. The casual reader of
newspaper accounts and statements by
Messrs. McAdoo and Kitchin and
others might assume that somebody
was opposed to corporation war
profits tax and that somebody else
was opposed to taxing large peace
profits
All Favor War Profits Tax
The fact is that committee members
and Treasury officials alike are out to
tax war profits and all profits that are
large. Mr.. kitchin's plan is just as
much war tax as Mr. McAdoo's.
Both rest on general scheme of tax
ing all profits in excess Of certain
deductions, which deductions are sup
posed to represent reasonable normal
peace profits. The difference is simply
the technical one of how shall be de-
termined the amount to be squeezed
out
-, Mr.. Kitchin favors the capital per-
centage plan, whereby the larger the
percentage of profit on invested capital
the larger the percentage Of the profit
that shall accrue to the government
1t is essentially the plan of the present
law as to excess profits, only Mr.
Kitchin makes the deduction little
larger in his present plan and then
makes the graduations of tax percent
age sleeper and higher. so that on all
margins of profits beyond 50 per cent
he would collect so per cent.
Now the so-called fiat war profits
plan of Mr.. McAdoo is simply to take
80 per cent of all profits above the
margin of deduction and have no grad
uations according to the relation of
the profits to the invested capital.
To Adopt Both Systems
Mr.. Ktchin thinks his plan will
bring in S500,000,000 more than the
McAdoo plan.
Anybody can sit down with a pencil
and pad and show how in some in
stances one plan win yield more and
In other instances the other will be
the more eXacting.
The committee has come to the de-
c,slon to adopt both systems and then
let the Treasury apply whichever will
yield the most as applied to each bust
ness's return. The difference that still
is to be accommodated is that the
treasury people prefer the present
law for the capital percentage plan
. instead of the Kitchn revision of il
But while this discussion is going on
it is noticeable that the committee is
saying nothing about the new personal
income provision or about the applica-
ton OF the excess profits or war profits
tax to individuals and copartnerships
1t was intimated o-day that the com
mittee was reservlng little scoop for
itseIt on these topics when the bill is
published. The scoop will probably
come as hard jolt to the individual
Following up the idea of getting the
taxation tentacles onto every one, con-
siderable increases and extensions Of
the scope OF this form of taxation NAV
be expected. Incomes of from $4,000
TO $4,000 get off pretty lightly under
1he present law, and the total yield of
money to the Treasury from all me-
dium sized incomes, which are tremen-
dous IN the aggregate, is not relatively
much.
Lighter Tax on Autos
1t has been definitely decidea that
the corporation income taxes may be
paid IN three instalments, the first to
f&ll due March Is and the others in
June and September Cash payments
will win a discount Of 10 per cent.
The committee took pity on automo-
bile owners to-day and rewrote the
tentative paragraph regarding them.
AS now drafted the automobile tax will
be according TO horsepower az fol-
lows: Twentythree horsepower or
less, so; "a to 80. $40; 81 to 40, $50;
over 40, $50. This is an easier rate
than the one first agreed upon, which
was sliding percentage plan, the rate
,ncreasing with the retail price of the
car
While the revision Of the automobile
tax will reduce the contribution to the
Treasury from this source, the com
mittee has drafted an easier tobacco
schedulc, which is calculated to yield a
larger total. Instead Of the rates an
nounced few days ago, which wore in |
zome instances three or four times the |
rates, the revised draft cx-
actly doubles the rates of the present !
law all the way through. Cigars will |
now pay from S. TO $40 a thousand.
from 81 10 $3.50 and tobacco
ard snuff 20 centz pound
Transportation charges on freight en-
route by rail from Il foreign country,
which now escapes taxation, w7l pay q
per cent, the same as all domestic
freight, the committee decided to-day.
The transportation Of oil in pipe lines
will pay en- inatead Of per cent.
Tax ON Leased Wires
Newspapers, news associations.
brokerr, etc, were introduced 10 the
horrors Of var with tax Of 10 per
and telephone lines and talking cir.
.uits." II is said that this VIII be
sv>sous TO small daily papers, which