The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-08-20
Stamps Unqualified Dlsap-
proxal on Committees
Compromise Offer.
DrSCoNCERTING EFFECT
If Prohibition Measure Passes
Tax on Coffee, Tea and
Cocoa Will Be Inserted
in the Bill.

Washington, Aug. 19.--Secretary
McAdoo sent a letter to Chairman
Kitchin. of the ways and means COM
mittee. today expressing his unquah-
fed disapproval of the committees
compromise offer in the matter of the
tax rates on excess profits. He IN
sisted upon the acceptance of his origi-
nal proposal that in view of the adop-
ton of the so per cent tax on war
profits the rate on excess profits should
be allowed to remain as they are in
the present law.
Secretary McAdoo also informed Mr..
kitchin that the normal income tax
on individual incomes should be IL
per cent instead of 10 as agreed upon
by the committee, and that on un-
earned incomes there should be an
added differential of per cent. max
ing the rates on such incomes 10 per
cent.
The sale Of bonds OF the next
liberty loan will be promoted.
Secretary McAdoo said In his let
ter. by putting the rate on I'M
earned incomes up tn this high
figure, for the reason that per-
sons enjoying large incomes of
that character will and 1t to their
interest to invest their profits in
| liberty bonds rather than submit
| to the Is per cent tax.
Secretary McAdoo's letter had a
disconcerting effect upon the COM
mittee, which has been stubborn in
its refusal to accept the treasury rec
concentrations IN the matter Of the
war profits and excess profits rates. A
majority of the committee. led by
| Chairman Kitchin. has insisted that
the excess profits rates should be in
creased in spite Of Secretary Me
/ Adoo's objections.
| To Finance Committee.
| 1t was stated today that the COM
mittee probably will insist upon max
| ing some increase in the rates. and
/ that Secretary McAdoo will then be
forced to carry his case TO the senate
finance committee If he is TO win on
the point that legitimate business will
be unjustly buDdened by any increase
| in the taxes on their profits.
The committee decided to levy a
tax OF 0 per cent on all sightseeing or
''ruboerneck" wagons. There is no
estimate of the amount of revenue the
tax will produce. but II is expected
that the tax will be collected from the
! passengers in the form of an addi-
| ton to their fare
The question of placing a stamp tax
on all narcotics was discussed at
length. but no decision was reached.
In the matter of the taxes on alcoholic
beverages, ii was decided to put off a
decision on them until the very last.
the reason being that the prohibition
amendment is still undecided in the
senate and the committee does not
know whether or not there will be any
beverages to tax.
May Tax Coffee and Tea.
II the prohibition amendment
passes. the committee probably will
decide upon consumption taxes on
coffee. tea and cocoa to make up the
deficit.
| 1t was decided to increase the tax
on playing cards from Z per cent to
8 per cent; all the other stamp taxes
In the present law were left unchang-
ed. Figures submitted to the COM
nittee showed that the sales of play
ing cards have been dropping off I'M
til they are not more than so per cent
of what they were before we got into
the war. AS a reason for this IL is
explained that the women's bridge
clubs are no longer in session. that
the women who had to have a new
deck for every game are now knitting
for the soldiers or working for the
Red Cross. Most of the cards now
in use, are used by the soldiers in the
camps and abroad, and they are glad
to get any old kind of cards, whether
new or not, so that the sales have
fallen OFF to such an extent that the
per cent tax now imposed brings in
little revenue.
! The committee intends to wind UT
its discussion of the income tax to.
morrow.