The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-10-23
SENATOR'S KILL
KITCHENS DUAL
TAXON PROFITS
Committee Substitutes Com
bination Plan Less Bur-
densOme to Business.
REQUIRES SINGLE RETURN
War Profits Levy to Apply
Only to Corporations Max
ing Swollen Gains.
REQUIRES SINGLE RETURN
special Despatch to THn suS.

WASHINGTON. Oct 22.-The Kitchin
war profits taxes and excess profits
taxes went by the board to-day. and as
has been predicted many times in THE
suN the Senate Finance Committee
substituted an altogether new plan for
'.xing business profits. The commit
also completely revised the surtax
ATS on individual incomes.
The Senate committees plan in rela-
lion to taxes on business is believed by
the committee to be more in con-
formity with the ideas of the Treasury
Department than was the Kitchin plan.
1t Is also their belief that II will be In
o general way less burdensome to busi-
ness and will meet much OF the criti-
cism levelled at the taxation scheme
Of Mr.. Kitchin. The committee did not
eliminate either the war profits tax or
the excess profits tax. 1t has worked
out a combination Of the two along
what II believes to be more equitable
lines.
Lifts Load From Fair Prohts.
The effect Is to tighten the burden
materially en- ordinary business profits
while sti.l heavily assessing swollen
profits. In tumbling over the edifice
erected by Mr.. Kitchin the committee
has invited a stiff fight in conference,
as the excess profits schedule revised
to-day was one Of Mr.. Kitchin's pet
projects, and the majority leader Of the
House is certain to make a determined
effort to secure its retention in the bill
as it finally was agreed upon.
Under the Kitchin plan the excess
Profits rates are 35 per cent. on the
amount Of net income exceeding the
credits allowed and not exceeding 10
per cent Of the invested capital. so per
cent of the amount OF net income be-
tween Is per cent. and 20 per cent or
the invested capital and 10. per cent. OF
the amount OF the net income exceeding
% per cent. of the invested capital.
Ihe committee to-day combined the
FIRST two brackets of the tax as MT.
Kitchiu wrote them and reduced the rate
As we'll. AS revised to-day the rates are
30 per cent. of the amount OF the net
income exceeding the credits and not
exceeding 90 per cent OF the Invested
capital and 60 per cent. of the amount of
the net income exceeding 20 per cent OF
me invested capital.
with the combination of the excess
and war profits to-day the Finance Com
nlttee did away with the necessity OF
every corporation making two complete
tax returns--one under the war profits
method OF computation and one under
he excess profits method. The Kitchin
plan vas that these two returns should
be made by every corporation and then
the tax paid under whichever one showed
the highest amount due.
War PROFITS Tax Not % Hit All.
The war profits portion OF the commit
tee plan does not apply to all corpora
tons. Only those whose profits still
show an excess after paying the excess
profits tax are assessed. The effect of
the change made by the committee to-
day is 10 make the so per cent. war
profits tax apply exactly az heavily as
IN the Kltchin bill II II applies at all.
The text of the new section to take the
place of the complicated dual system o.
taxes in the Kltchin bill is as follows:
That the tax shall be the sum of the
amounts computed under the following
brackets:
81. Thirty per cent of the amount
OF the net income In excess OF the
excess profits credits and not in ex-
cess OF 20 per cent. OF the invested cap
Ital and
80. Sixty per cent of the amount OF
the net income in excess OF 20 per
cent. Of the invested capital
~. The amount by which 80 per cent.
Of tIe net income In excess of the
war profits credits' exceeds the tax
computed under the first and second
brackets
in any case where the full amount
or the excess profits credits Is not al
loved under the first bracket the por-
tion not so allowed shall be deducted
from the amount In the second bracket"
To protect small corporations the
committee adopted this amendment to
the blll:
That the tax imposed by section
5ol Cthe schedule quoted above) shall
IN no case be more than IS per cent.
OF the amount OF the net income in
excess OF $4,000 and not In excess OF
10000 plus so per cent of the amount
oi the net income In excess OF 100000.
Nothing In this section shall be con-
slrued In such manner as to increase
the tax imposed by section 30i."
The credits to be allowed for wal
profits were changed IN one importan,
particular. Under the Kitchin bill II
tCoatinued on Fifsh Pa0c.)