The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-06-27
IB|G BUSINESS HAS
SPLIT IN DEBATE
ON EXCESS PROFIT
lAdoption of English Sys-
tenn Is Proposed by
National Bodies.
MAY T AK AUTOS
Motion Picture Stars Ask
for Exemption From
Law-Methods Of
Collection.
MAY T A < AUTOS

Washington, June 26.-BfE ousf-
mess, az represented by the national
land state manufacturers associations.
IYave the ways and means committee
ktoday widely divergent views as 10 how
the government should collect taxes
ron the excess profits due 10 the~war,
The national association urged adop-
ton OF the English system. which
separates pre-wsr profits from war
profits. while the state associations
favor retention of the present system
with greater exemption on invested
capital.
A federal license tax on all automo-
hiies, whether used for pleasure or in
business. WAS recommended by the
National Automobile Dealers associa-
ton. Their representative, F. w. A
Fesper of st. Louis. estimated that
such tax will raise at least $4,000
600 year, The aSociation will not
oppose higher tax on manufactur~
ers' sales but regards tax on gaso-
lire as unnecessary.
stars Of the motion picture world,
including some of those whose salaries
run up TO six figures sent as their rep
rcsantative Grant Carpenter. of Los
Angeles. Cal where rs per cent OF
the motion pictures are produced. 10
plead for exemption from the excess
profits tax Of incomes derived solely
Wrought their art They recommend
ed heavy taxes oa uuearneQ incomes,
an emergency TAX ON account iated
wealth and inhertance$, a heavy tax
on all profits OF persons manufactur~
ing articles used in the war. and tax
on all private. homes costing more
than $40 000
Clash Occurs.
The clash between the national and
- 4 .
occurred when James 4 Emery was
called upon Ia speak for the former
aud j. Frank Zo}ieE. Of Schenectady.
appeared the representative OF the
state t,pdles Emery told the commit
lee that upon this vital point in the
tax law the two sets of associations
differed. He presented the view Of the
national organization and urged that
the following method of deriving ex-
cess profits be adopted:
Select five years before the war, pre-
ferabie le1t 10 1918. and find what
the profits were during that period
Out of these FIVE years allow the
manufacturers themselves to select
three years by which the average an
nual profit shall be fixed.
Add to this figure the average nor
nal increase of capital invested and
the profits earned upon 1t.
Upon the figure thus obtained levy
the amount of tax which the govern
srnent needs, consistent with the ability
OF the company to pay the tax
Several of the members OF the COM
mittee engaged In discussion over
use OF the term excess profits. Chair
imam kitchin suggesting that the com
'mtttee should adopt the term business
sprosits instead. as has been done In
Canada
q
tcommittee by the association were as
follows:
!. That heavier tax be placed on
unearned incomes of more than $50
600 year. Below this sum and In
excess of $4,000 unearned incomes
1hould bear graduated tax
II, y. That incomes derived from oc-
'cupatfons based on personal Service
land having no relation TO the war be
excluded from the operations Of the
excess profits tax
). That the excess profits provisions
be changed TO conform to the Eng
Insh procedure: that is, taking so per
cent or the actual war profits, with a
special provision that where such
profits are derived altogether from
the manufacture of articles essential
10 the prosecution OF the war, all in
excess OF normal pre-war profits be
taken by the government; and in bust
ness that had no pre-war existence all
profts above reasonable earnings on
the invested capital be taken,
"A. That a direct emergency tax at
graduated rates be imposed upon &C
cumulated wealth. inherited or un-
earned, in any form whatsoever. in ex-
cess OF a principal of $25o,D0o, with
provisions that will prevent a shift
ing OF the burden during the war and
for ten years thereafter.
S. That a heavy surtax, equalling
the present excess profits tax, he
placed on unearned incomes in ex-
cess of $4,000, and an addition surtax
on incomes derived from inherited
property.
s. That heavy direct tax be placed
on the membership of social and coun-
I try clubs and unon private homes in
excess OF the valuation OF $4,000.
I. That direct tax Of per cent
~ placed upon all accumulations Of
wealth in excess OF 100000 when
earned by the possessor: Z per cent on
. similar Accumulations which have
b1en Inherited; . per cent on such In
herltAnces In the second generation:
and per cent on all inherited wealth
U belonging to persons residing parma
nently abroad.
5. That tax be put on all the profits
frotn articles used by our government
~ the allies In the prosecution Of thu