New-York tribune., 1918-01-06


46 on portions of income exceeding 300, 900
30 on portions of income exceeding 600000
90 on portions of income exceeding 10000
GIL on portions of income exceeding 100000
b2 on portions of income exceeding 1900 900
C3 on portions of income exceeding 100000
81 have yet to discuss the revenue
act of October 8, 1917, said Senator
Smoot, with person who understands
just what the act means. / am positive
there are but few who will not freely
admit that the CT of October 8, 1917,
should be amended. Not only is it un-
workable but the taxes imposed are
unscientitic and discriminatory.
The amendment provides a taxing
SYSTEM continued Senator Smoot,
that any ordinary business man or
individual can understand and will
have no trouble in making out tax
return.
Would Need No Advisory Board
"If the amendment becomes law
there will be no need of an advisory
board to prepare Treasury decisions,
! such as is the case to-day, nine of
such decisions having already been
rendered and approved by the Secre-
tarry of the Treasury. Such a decision
is nothing more nor less than legislat-
board appointed by the Secretary Of
the Treasury. | consider this a very
unwise procedure.
1.-The amendment makes no change in
the normal rate Of 2 per cent upon
all net income Of the individual, but
it consolidates the surtax rate i'm
posed by acts Of September 8, 1915,
and October 8, 1917. 1t does away
With the two different amounts of cx-
r N n n11 * vol of
provided under existing laws, and
allows the sum Of $1,000 exemption,
Plus $1,000 additional for the head of
the family or a married man with
wife living with him, or q married
woman with husband living with
her, and also provides if the person
making the return is the head of
tional exemption of 5000 for each child
dependent upon such person under
eighteen years of age. or if incapable
of self-supDOrt because mentally or
physically defective. This provision
shall operate only in the case of one
parent in the same family.
Defines New "Pre-War" Period
'1nstead Of the different normal
taxes imposed under existing revenue
acts, amounting to per cent upon
the total net income of all corporations,
the amendment levies a straight tax of
per cent. upon the net income of all
corporations except those whose net
income is less than $4,000 This per
cent is not imposed upon individuals
or partnerships. This 8 per cent rate
upon corporations will raise $3.50 OOO-
600 over and above the amount that the
per cent rate under existing laws
Will yield, or in other words, the
amendment will provide revenue to
the government of $715,00O,O0O on cor
poratlon incomes, in place of $536 OOO.-
COO under existing laws.
he greater changes provided for in
the amendment to the existing laws
will be found in Title 2, designated in
the act of October 3, 1917, as war ex-
cess profits tax and in my amend
ment men, as war profits tax Under this
title the amendment only taxes the war
prohts and at graduated rates. Under
this title the pre-war period means the
thfce years OF the calendar years 1909.
1910, 1911. 1912 and 1918 remaining at
ter the exclusion of the two calendar
years in which the net income OF the
trade or business was respectively the
greatest and the least. These five wears
taken as pre-war period, will result
IN much taIrer normal income Of all
classes OF business than the three
years 1911, 1912 and 1913. provided in
existing laws.
New War Profits Tax Provisions
Section 202 oe the amendment nro-
vldes an additional tax to the taxation
under existing law, and under this act
10 be paid for each taxable year upon
the income of every corporation. na 1T :
nership or individual engaged in trade
or business equal to the following ner
ccntages of the war profits of each
trade or business:
10 per cent war profits not IN excess or
~ per cent of the pre-war profits
- - per cent on war profits not in excess
OF 70 per cent Of the pre-war profits
10 per cent on profits not in excess
OF ~ per cent of pre-war profits
~ per cent war profits not in o,cssa
of ~ per cent of the pre-war profits
- per cent on war profits not in excess
oi ~ per cent of the pre-war profits
81 per cent war profits not in cNcess
OF % per cent of the prc-war profits
~ per cent on profits not in excess
OF ~ per cent of the pre-war profits
ou per cent on war profits not in excess
OF 50 per cent of the prc-war profits.
Of o. 90 per per +S war profits not in excess
20 per cent on war profits not in excess
of 100 per cent of the pre-war profits.
~ per cent on war profits above 100 per
cent Of the pre-war profits
"War profits are ascertained bv do.
duc.ing the pre-war profits from the
net income of the trade or business for
the taxable year and pre-war profits arc
the average annual amount of the net
income Of the trade or business durinu
the prc-war period plus s per cent Of
the amount of new capital and minus
8 per cent Of the amount of capital
withdrawn.
The estimated revenue to be derive j
from this act will amount to sl,35l.
O5COOO, based upon war profit of s3.-
3Oo,0oO,000 for the year 1917 This is
an increase of revenue over the excess