Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1918-12-13
REVISED war TAX BILL
Summary Of Report Of Finance CON-
mittee OF Senate
House BILL Is GREATLY REDUCED
The Bill as Originally Drawn Was AS
suming the Continuation Of the
War-Senate Has Made a Complete
Revision-Question Of 1920 Taxes is
Causind Controversy

tion on the present and future prob
lens of taxation are outlined in the
senate finance committees report on
the revised war revenue bill. filed by
Chairman Simmons.
The report explains the steps taken
to revise the house bill so as TO raise
by taxation next year s5,97S, 466, 600.
instead Of $500. 900. as planned
by the house before the signing of the
armistice and the enactment OF prohi-
bition legislation. Proposed taxes in
1920 Of $4,000. 900. 900 is the reason for
fixing them ut this time. and the man.
ner in which they will be raised, also
are explained.
The most distinct charges made by
the senate in the house draft Of the
bill are noted by the committees re-
port as follows:
Elimination of the per cent corpor-
alton tax on undistributed corporate
earnings. fixing 90 per cent maxi
mum on bona fide sales Of mines and
oil and gas wells. elimination Of the
tax on new state and municipal bonds;
substitution Of n single war excess
profits tax for the alternative.
Senate debate on the measure began
Tuesday with a statement by Senator
simmons. A dissenting report on the
plan to fix 1920 taxes In the pending
bill will be filed by Senator Penrose OF
Pennsylvania for the Republican fin
ance committee. Separate views also
will be presented by Senator Smoot OF
Utah and La Toilette OF Wisconsin.
Republicans.
A considerable part Of Senator Sim
mons report is devoted TO the plan for
reducing taxes in 1920 TO $4,000. 900, =
900.
The country has a right to know
how soon and in what degree the bur-
den Of the war taxes can prudently
be reduccd the report says.
During this period Of reconstruction
business, particularly new business, Is
entitled to go forward without the bur-
den Of 80 per cent tax on war profits.
In time Of peace the existence Of an so
per cent profits tax would be an abso-
lutte evil for the perpetuation or con-
tinuance Of which no sufficient reason
has or could be given
For 1920 the report estimates re-
duction OF sl.40O.O00.000 by eliminat-
ing the 80 per cent war profits tax. re-
duction of the excess profits rates and
reduction from ~ to s per cent in the
normal rate on individual incomes and
of the corporation tax. A further re-
duction of about $500. 600, 900. 1t was
estimated. will occur from miscellane-
Gus sources and shrinkage in bevcr-
age revenues.
The main outline Of the programme
proposed by the committee thus be-
comes clear" the report states. For
the fiscal year 1919 it is planned to
raise nearly $4,000, 100000 from in
come and profit taxes and something
over 81. 400. 900. 900 from other sources;
for the fiscal year 1920 1t is planned to
raise somewhat less than $4,000, ,000,-
900 from income and profits taxes, and
about $1,000. 100000 from other
sources. About the general wisdom of
such a programme we entertain no Sc
rious doubt. II is imperative that
profits for the year 1918 be heavily
taxed. This is not only necessary, but
1t is equitable in accordance with sound
public policy. The profits realized dur
ing the year 1918 are in large part war
profits; they are now in the pockets OF
the taxpayer; they should contribute
heavily before they are dissipated or
re-invested toward the payment OF the
expenses Of the war to which in large
measure they are attributable.
But II is equally important that
these special taxes should be reduced
as the occasion which inspired and
justified them recedes into the past. To
fail adequately to tax the war profits Of
1918 would constitute a manifest mis-
carriage of fiscal Justice. Not to pro-
vide now for the reduction Of the war
profits tax would be equally inexcusa-
ble."
In addition to the tax reductions due
to the fact that the government now
copes with peace instead Of war condi-
tions, prohibition Is expected to reduce
revenue returns greatly.
Beverage taxes under the house bill
were estimated to raise S1,137,000,000
during their first IL months Of opera
ton and $3.50, 900, 900 for the 1919 fls-
cal year.
AT the present time under changed
conditions" the report states. ut is
possible to count only upon $500, ,000,-
900 for 191s-1919 and 393,000.000 for
1919-1920 from this source"
Analysing in detail the committee's
radical changes, Senator Sin mons re-
port explained that the revised indi-
vidual surtax rates graduated upward
per cent on each $1,000 over $4,000
are more equitable than the arbitrary
graduation Of the house bill.
The bill retains the house provisions
for income taxation Of salaries. includ-
ing those possibly Of the president and
Federal judges. legality Of which, the
report states. is left to the courts II the
question is raised. The report, how
ever, says that the house clause for
Federal taxation Of new state and mu-
nicipal bonds was stricken out as "it
seems unwise for congress to attempt
to impose this tax upon the obliga-
tions Of state and municipalities as long
as the states are not free to tax In a
similar manner obligations Of the
United States. The plan Of requiring
affiliated corporations to make consol-
idated income tax returns. the report
states, will do much to prevent tax
evasion and the new tax on life insur-
ance companies true income" from
investments In lieu Of war excess, in