The sun., 1918-08-31
FLAT 12P. TAX Is
SET UPON INCOMES
Continued from First Page.

his fight to provide for a fiat tax of IL
per cent. on all corporate income as a
normal tax. The committee provision
that undistributed income should pay Is
per cent. and that income distributed to
stockholders should pay IL per cent. will
remain in the bill. Mr.. McAdoo is op-
posed to this provision, but is willing to
reoede in the interest of getting the bill
before the public before the next Liberty
Loan is fioated.
The bill. when the supertaxes in the
higher brackets are reduced to meet the
Increased revenue from the individual in
come. will produce even more than the
stupendous total for which the bill was
drawn. Instead of $4,000, 900 900. the
hill is counted upon to raise $500, 00O,-
900.
As predicted in THE SUN this morning,
the loss of revenue from the liquor taxes
after July l next year will have to be
met In some other way IL the war con-
tinues after that date. Mr.. Kitchin esti-
mated to-day that as the bill will not
take effect until approximately November
/. taxes from distilled beverages and
beer will be effective for twelve month
period from the time OF the passage Of
the bill. Instead. the bill will be in eff
feet only eight months of the next fiscal
year and the consequent loss of revenue
will be $3.500.00O. This Mr.. Kitchin fig
ured on the estimate of Sl,1O0, 0OO, 900 In
revenue from liquor taxes in a twelve
months period.
The committee. in drawing the final
draft of the revenue law. struck out the
so-called catch clause" affecting cor
porations having an invested capital Of
100000 and over. Mr.. Kitchin. ex-
planning this said:
Most of the corporations that would
have been hit by the catch clause will
lie hit by the excess profits tax. which
provides deduction of only $4,000 and
per cent, OF the invested capital be-
lore assessing the tax"
Excess PROFITS Plan Settled.
The committee won in its contention
with Mr.. McAdoo on the question Of the
excess profits. Instead OF the present
rates, desired by the Treasury Depart
ment. the committee stood pat on the
demand for rates OF IS per cent, SO per
cent. and 70 per cent. The first rate APP
plies to portions Of corporate income
above the exemptions allowed and not
| exceeding Is per cent. of the invested
! capital. the second rate applies TO por-
! tons of income between Is per cent
and 20 per cent. of the invested capital
and the highest rate applies only to por-
| tons of income in excess OF 90 per cent
| of the invested capital. This excess
profits tax Is to be imposed when the
war profits rate of so per cent on all
income exceeding pre-war earnings, is
not applied.
The most recent battle between the
| Treasury Department and the Ways and
Means Committee as to whether a sub
committee should call upon Mr.. McAdoo
| or whether Mr. McAdoo should call
upon the committee was settled by the
first named method being followed
Chairman Kitchin. accompanied by
Re personalities Fordney, Longworti
and Garner. called upon Secretary Nc.
| Adoo this morning and the compromises
| worked out later in the day were the
| direct result of this conference
! 1t is Mr.. Kitchin's plan to introduce
the new revenue bill in the House Tues.
day and have it taken up for genera
debate two days later. The sudder
solution OF the vexing problems which
have held up the bill obviated the neces
sity of holding up the bill until a weel
from Saturday. 1t was explained to-day
| 1t Is the hope Of Mr.. Kitchin and his
colleagues on the committee that III,
entire bill can he disposed Of by The
House within a week. This will give tn,
| Senate Finance Committee time L
thresh out their ideas of what take
should be included in the measure. AM
meet the suggestion of the Treasury
Department that the public be allowed
to know how much 1t must pay in taxes