The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-27

made up of both earned and une armed in
comes has influenced the committee in
favor OF simplifying this statement as
far as possible.
The suggestion meeting with most
favor is that provision be made that an
abatement OF 20 per cent. of the income
tax shall be made in the case OF incomes
OF less than $4,000 II more than half
Of It Is unearned. This would lave the
effect Of imposing a normal tax OF only
per cent. on incomes Of less than $751;
900. II more than half of 1t Is earned.
In addition to considering the super
taxes the committee to-day practically
perfected the excess profits tax as 1t will
be written into the new tax law. The
committee left undisturbed the rates
tentatively agreed upon yesterday. but
qualified the tax so that 1t should not
amount to less than 10 per cent. Of the
net income nor more than so per cent
of It in the case OF corporations capital
lied at more than 100000. TIE COM
mittee exempted common carriers and
public utilities from the minimum tax
provision because their rates are subject
to Federal, State or municipal regula-
lions.
Thirty per cent. on $4,000 1.-THE amount
of the total net income rot exceeding
20 per cent. of the capital minus the ex-
emptions OF 10 per cent. OF the invested
capital and the $4,000 fiat exemptlon),
or $4,000.
Fifty per cent of $4,000 met Income
excepting 20 per cent. and not exceed
ing 2j per cent. of the capitaD, or $4,000.
Eighty per cent. of $4,000 met in
come exceeding IS per cent. of the CAPT
tall, or 100000.
Total excess profits tax, s64,900
pal ~
NAL tax. s35.100.
II half OF this balance Is distributed
IN dividends and the other half retained
In the business after deducting the $4,000
exemption allowed In the normal tax,
the ~ per cent. tax on the half distrih-
uted would amount to Sl,9S6, and the Is
per cent. tax on the half undlstrbuted
would amount to S2.979. The total nor
NAL tax on both classes of net Income
, (after excess profits taxes are deducted)
would amount to s4.9G5.
Would Leave 30 Per Cent. Proht.
The excess profits tax and the normal
tax together would total s69.s65.
AS the net income subject to tax was
was 100000 and taxes amounting TO
s69,s65 are taken from this figure by
the Government. the company would
have earned after taxes are taken out
S30,135. This would amount to trifle
more than 80 per cent. on It's invested
capital.
The committee once through with In
come taxes OF all sorts will turn to the
present list OF special taxes OF all sorts.
including taxes on tobacco. liquor, beer,
admissions automobiles, &c.
Many of these articles were included
In the class of luxury taxes sent 10
the committee by the Treasury Depart
ment. The present idea Of the commit
tee Is to double the rates now existing
instead OF adopting the extremely high
suggestions of the Treasury Depart
! ment Many committee members con-
tlnue to feel that instead Of raising rev.
enue the Treasury suggestions, while
encouraging thrift through the discour-
agement OF useless expenditures by the
people. also would drive many people
| out OF business
The taxes on these things are calcu-
lated to yield $500. 100000. Doubling
| tho rates might result in not quite
doubling the revenue from these mIscel-
| laneous and excise taxes. but the COM
mlttee expects that revenue OF nearly
81 coo, 600, 900 might be realized.