Evening journal., 1918-07-24
Is PER CENT TAX
ON NET incomes
House Committee Decides
on Plan for Assessing
Corporations
RATE TO BE TRIPLED
ON NORMAL PROFITS

WASHINGTON, July 2i.-An IS per
ant. normal tax on the net income OF
corporations. with provision. however,
that only i2 per cent. shall be levied
on the income distributed 10 share
holders, has been agreed upon tenta-
lively by the House Ways and Means
Committee Members Of the commit
tee believe that the lower rate on
earnings distributed will have a ten
dency to break up large corporate
surpluses and force the money out
where It can be reached by the sur
tax on individual incomes. The present
normal income tax on corporations is
per cent.
after today's session, made this state
ment:
"The committee has under discussion
today the income tax on corporations
discussing the rates practically all day.
THE following rates were suggested
and discussed:
Twenty per cent. on the net income
of corporations, with proviso that on
the amount distributed the sharehold-
ers only 10 per cent. should be levied.
Eighteen per cent. on the net in
come Of corporations, with a proviso
that on the amount distributed TO
shareholders only ~ per cent. should
be levied.
''The following rates also were sug-
gested:
"a fat rate Of IS per cent. on the net
income; and
"A fiat rate Of ~ per cent. on the net
income.
while no definite decision was
reached, Il seemed that a majority Of
the committee favored the provision Of
the IS per cent. rate on net income,
with the reduction TO t2 per cent. on
the amount distributed TO sharehold-
ers."
The proposed arrangement OF the
normal income tax on corporations IS
in line with Treasury Department views
and IS a new plan In Federal taxation.
The proposal resulted from testimony
at committee hearings that many cor
poratlons keep a certain portion OF
their annual profits in the bushes in
stead Of distributing the entire profits
TO stockholders who would have to pay
a surtax on &C.
An industrial survey TO determine
the nations taxable resources as an aid
TO the Ways and Means Committee In
framing the income and excess profits
sections Of the new ss,0O0,OOO,OO rev.
enue bill is under way. Committee
members said today they expect TO
raise approximately s5O00,0OO,OOO from
excess profits and incomes, but until
the resources are more clearly deter
mined no definite plan will be begun.
Some members still hope 70 raise So
600 100000 by taxes on war profits and
incomes.
Members of the committee pointed
ont that Great Britain expects TO raise
So 600 OOo, 900 from its income and ex-
cess profits and they said II that Is
possible there 1t will be logical to con-
clude that at least sj.0o0,000,0oO could
be raised IN this country.
The committee received a petition
from American residents at Fort VIII
liam and Port Arthur, Canada, asking
that Congress relieve American citizens
in Canada from the American income
tax. because they have to pay one TO
The Canadian Government.
The Treasury Department today noti-
fed the committee that the sugges-
tlons which II recently submitted as to
taxes on luxuries and non-essentlais
would produce the s2,0O0,0OO,0OO which
luxuriss should yield under the sS,OOO'-
100000 new revenue law.
The committee resumed work today
on the bill, turning attention again to
income taxes. Mr.. Kitchin has Informed
members OF the House that in their
plans for being away during the re-
cess period they should plan to return
to Washington i'm time for a vote on the
revenue bill about September 4.