Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1918-08-07
COMMITTEE HEARS EXPERT
ON EXCESS PROFITS PLAN
Differences Between Ways and
Means Body and Treasury De-
partment Sharply Defined.
KTCHIN ISSUES STATEMENT
Declares British Plan, Proposed by
Secretary McAdoo, Would Heavily
Tax Small Corporations, but Not
Large Ones.
ITCHIN ISSUES STATEMENT
IBy A.sociated Prens. 1


WASHINGTON. August e.-Difer-
Means Committee and tax experts OF
tho Treasury Department over the
method OF levying excess profits taxes,
to BIO inserted in the $4,000. .ooo. 900
war revenue. bill now being framed,
were considered to-day by the commit
tee and DR.. T. S. Adams, chairman Of
the Treasury's excess profits advisory
board
Chairman Kitchin. at the close OF the
session. announced that the commit
tee probably would adopt an alter
native system of applying prewar prof.
It's as a basis where they would pro-
duce greater revenue than the ex-
cess profits tax. He also said that the
committee and Treasury would "get
together" on the excess profits tax as
soon as Secretary McAdoo has gone
over the system tentatively adopted by
the committee. The plan OF superim-
posing a strictly war profits tax In ad-
dition to the excess profits tax did not
develop much support in the committee
to-day.
The excess profits levy. upon which
the Treasury and the committee differ,
hinges largely on the matter of deduc-
tions to be allowed. The English
plan. for which the Treasury contends,
allows the deduction TO be made by
corporations to correspond to the
amount OF the profit in the prewar
years ls1l-1a. The effect Is that a
corporation making big profits before
the war can deduct corresponding
amount from the income of the taxable
he
balance. The committee plan ignores
the prewar profits and allows deduc-
tions to all. corporations based on tho
invested capital. The alternative plan
TO be substituted by the Treasury IL
the Treasury finds 1t will produce moro
revenue is based upon strictly war
profits.
Chairman Kitchin made this state
ment tonight:
we read the income tax section OF
the tentative bill at this mornings
session and got down to the deduc-
tions and credits, without taking any
further action. DIR. Adams discussed
the excess profits and alternative war
profits plan at this afternoons session.
He takes the same view as the Treas
ury Department as to having the two
methods. Their proposition Is for so
per cent tax on excess profits and
they want the alternative plan with
it. They want the excess profits rates
as in the existing law and a real war
profits tax as an alternative. We arc
going to have an excess profits tax.
We have already tentatively agreed
to one. The majority Of the commit
tee seems to want tho alternative plan
too.
III we have a war profits and ex-
cess PROFITS plan with the latter rates
the same as In the present law. nine
ktenths OF the corporations in this
Gountry will pay an increased tax OF
from SO per cent UP to as high as 800
to 400 per cent more than in 1917.
while one-tenth of the corporations
OF the country will pay no tax at all
on their increased income. This is be-
cause they were making practically as
much before the war as they have
been making during tho war. The
committee wants the present law ex-
cess profits raised to equalize this sit
uation.
we will probably take up the In
come tax Tomorrow"