The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-10-23

2 specific exemption of $4,000 and the
average of rs pre-*ar earnings foF
3sff. 1917 1913. The excess profits
tax allowed an exemption Of $4,000
plus eight per cent of the invested
capital for the taxable year. and
rates OF taxation AZ follows thirty
three per cent of he income in ex-
cess of the credits and not in ex-
cess of fifteen Ter cent OF the invest
ed capital. fifty per cent Of the
amount of income between fifteen and
twenty per cent of the invested CAPT
tai and seventy per cent OF the amount
of income in excess Of twenty per cent
OF the invested capital.
Two Systems Combined
Tho combination Of these two sys-
TENS of rates which the senate COM
mittee adopted is as follows:
Section 3ot-that the tax shall be
the sum of the amounts computed
under the following brackets,
First hracket-thirty per cent Of the
amount OF the net income in excess
of the excess PROFITS credit and not in
excess Of twenty per cent of the In
vested capital.
/ Second hracket~si&ty per cent Of
the net income in excess Of twenty
per cent OF the invested capital.
Third bracket-the amount by
which eighty per cent of the net IN
come in excess pf the war profits
credit exceeds the tax as computed
under tho first and second brackets.
III any case where the fun amount
of the excess protifs credit In not al
lowed under the first bracket. the part
not so allowed shan he deducted from
the amount in the second bracket.
The exemptions remain practically
the same.
The committee contends that the
method adopted is much sim pier thar
that put Iu the bill ty the house cont
mittee and that by combining the two
methods Of computing the tax-aIl
question as to the constitutionality OF
the alternative system which the
house proposed is eyaded, 1t is mo-
believed that the new rates will pro
duce as much revenue as was esti-
mated foG the double system in the
house bill. which was $I,791.0o0 ,000
On the ether hand the members of
the senate committee say hat the
rates Will he more equitable hat they
/ viii bear less heavily upon cuisines
that has not reapeti exorbitant pro
fits from the war contracts and tha
i II viii deal more harshly by those wht
are the real proti'ccrs of the war. A
qualifying section added to the new
laws fN Ire Sttidlt Ntilif1fiitft Is IN
tended to protect the smaller corpora
tions from unjust t7xation. II is
substitute for section 302 in the hous.
bill and is as follows.
Section So2-That tho tax imposed b,
section sol shall III no case he nsar,
than 80. nef eaflI ~ the amount Of Nh,
net income in excess of s3.0an 900 an.
not in excess of SEQ. 600. plus 3 pc
cont sf the amount of The net incom,
in excess of $50. 900. Nothing in tht
section shall he II such manner rs Il
increase the tax imposed by section sol
- surtaxes ON Ineomes.
The new surtaxes on incomes are es
ttfnated to produce a total of sl.45a,
oea. 600 as against an yiel,
Of $500 600, 600 under the rates whicl
the house adopted. The senate plat
is to add ! per cent to the surtax 70
every additional SO, 900 of ircome abov,
$4,000. so that the completed system
of rates, together with the amount O
revenue which IL is stimated wall b.
l~brodaacd from each classification o