New-York tribune., 1918-08-21
Excess Profit
Tax Fight Is
On natCapitol
co~rorations to Centre Fire
~ Senate Hearings on
Revenue Bill
Rv Theodore M. knappen

q wAsHrNGTON, Aug. 20.-Though
& :. Uavs and Means Committee and
3 =. Treasury have not yet entirely
a ..,.ed upon the corporation profits
..v.s the fight against the so per cent
-. rrofits tax already has begun.
CONSERVATIVES of companies whose
..s,s have enormously increased since
B i. v,r have arrived in Washington to
10, campaign to obtain a consider
8 .blv lower rate.
q rhsv will make their fight chiefly
.-oueh the Senate, and will probably
...t be heard from in the Senate
g;oauce Committecs hearings, to begin
= soon as the revenue bill is reported
;. .he House. which Chairman Kitchin
= the Ways and Means Committee in
.ica.ed to-day would hardly be before
/ aonday.
Line of Attack Planned
Il The line of attack on the 80 per cent
x.r nrofits tax will be as follows:
First-The important consideration
ma. now is to obtain production of war
rood, in sufficient quantity, and the
question of how the bill is ultimately
"a be paid can be left to post-bellum
alterations.
sscond-The imposition of high rates
a of taxation at this time is likely to
work Injustice and certain to discour-
age production.
Third-To play safe care must be
taken now to see that taxes are not too
high.
These arguments are expected to
4 aaye profound effect on the Senate's
attitude. Friends of the 80 per cent
l mpost already express grave doubts
4 IS to whether it will ever become law.
Informally the Ways and Means
Committee and the Treasury Depart
nent disposed of one of their principal
diferences to-day-that of the classif-
.stion of corporations under the war
profits tax. The excess profits tax
n!es are still unsettled. The commit
Tee has taken no formal action on
either Of these subjects, and so far as
the tentative draft goes the original
Ktchin provision for an excess profits
tax running up to 80 per cent still
stands.
Accepts McAdoo's Offer
In his answer to Chairman Kitchin's
compromise offer (Which was not for
maAy brought before the committed
regarding classiications and excess
profits, Secretary McAdoo discussed
only the classifcations item. AS
: against the Treasury's original eight
divisions Mr.. kitchin had proposed
three. The Secretary came back with a
suggestion to make it two, and that was
agreeable to Mr. Kitchin. These two
are as follows:
First - Financial, transportation,
street railway and public utility COM
9snIes, pre-war deductions of 8 Der
cent profits.
Second-All other companies, pre-
var deduction 10 per cent profits.
These classiiicatons are for the pur
poses OF the so per cent war profits tax
laelr significance simply is that any
company whose profits were less in the
He'war period than the deduction for
class may avail itself of that. Com
Paa'es whose pre-war profits were
greater than the percentages named
VII deduct the actual profits before
applying the 50 per cent tax.
@f' AcAdoo sent word to Mr.. Kitchin
'Aat ne did not approve of the com
p''nlse excess profits rates, but did
a'' discuss that matter in his formal
''ply Opinion differs as to the mean
of TINS omission. Some members
" @e Ways and Means Committee say
"s' II means that the bill will be re-
P''ed to the House with the excess
=. rates as named in the compromise
"s'-'hat is, the 40 and so per cent
's'sS. others think there is still q
''spect Of an agreement.
az any rate, the bill is now in the
''' stages Of preparation in all other
''pects' The Treasury Department
aas at the eleventh hour submittec
'ea'y'flve or thirty administrativ,
assestlons, chiefly in regard 10 the in
As Tax, which the committee put il
a'ss Of to-day considering.
Income Taxes Not Settled
''ae complexities have been en-
A.s!ed In the matter of a prefer
A@' rate on the earned portion o.
,s.s'hai ,''. income, and there is d posi-
s 'hat the rate may stand at /.
~ VENT on earned income and Is pc
:, S' On unearned, instead of 10 anc
- respectively. The Treasury expert,
"ying to frame clause that viii
s.,'. 'he situation. One Of the diff
is to allocate the two differen
a~ Of income With respect to the ex
.yaons and credits.
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