The sun., 1918-12-07

falling to comply with this regulation
would be punishable by a $1,000 fne,
u year in prison or both.
In Porto Rico ana Philippines.
The Finance Committee provided
that in Porto Rico and the Philip
pines the income tax is to be levied
under the old revenue law of 1915, but
empowering the legislatures Of those
possessions to alter, amend or appeal
the tax laws in force there.
The complicated dual system of i'm
posing an excess profits tax inc a
war profits tax adopted by the House
was eliminated by the Finance Com
mittee and a war exces profits tax
put in the bill instead. This tax under
the Senate Committee revisions Is the
sum of the following:
Thirty per cent. of the amount Of
the net income in excess of the excess
profits credit determined under sec
ton 312 and not in excess OF 20 per
cent. OF the invested capital.
Sixty per cent. of the amount of
the net income in excess of 20 per
cent, OI inc Invested capita
The sum-, II any, by which 80 per
cent. of the amount of the net income
in excess OF the war profits credit
determined under section 3l1) ex-
ceeds the amoun of the tax computed
under the first and second brackets.
For the taxable year 1919 and tax
able years after that the third bracket
is dropped and the rates in the first
and second bracket are dropped to 20
and 40 per cent. respectively. 1t is
provided that for the purposes Of the
act giving the authority to take over
the railroads and while the railroads
are under Federal control the taxes
imposed under the war excess profits
title shall be treated as levied by the
excess profits tax title Of the revenue
law of 1917, now in effect.
Exemptions to Corporations.
Corporations whose net income is
1000 or less shall be exempt from the
war excess profits tax The war
profits credit allowed is the sum Of
| s. 5000 and an amount equal to the
average net income of the corporation
for the pre-war period plus or minus,
as the case may be, 10 per cent. of the
difference between the average in
vested capital for the pre-war period
and the invested capital for the tax
able year Foreign corporations are
not entitled to the $4,000 exemp-
ton. The excess profits credit is the
sum of $4,000 and 8 per cent. of the
invested capital for the taxable year.
Foreign corporations do not get the
benefit of the specific exemptions of
| SO. 900.
The definition OF net income re-
manned substantially unamended. The
definition OF invested capital vas vir-
tually rewritten from the House bill.
The Senate struck from the bill all
OF Title ", the estate tax of the
House measure, and substituted there
for an inheritance tax. Under this
title the tax imposed Is / per cent. OF
the amount by which the beneficial
! interest passing to the taxpayer ex-
ceeds 10000, but does not exceed s25,-
900: 2 per cent. between $25, 900 and
$50. 900; 3 per cent. between $4,000
and 500. 900; 4 per cent. between
500. 900 and $3.50, 900; 5 per cent. be-
tween s150.000 and $1,000 0 6 per
cent. between 5000, 900 and $3.50. 900:
10 per cent. between s250,000 and
$500, 900; Is per cent. between $500, 900
and 81, 900, 900; 20 per cent. between
81, 900, 900 and 81, 500, 900, and rs per
cent. in excess of So. 500. 900.
Under transportation taxes h new
! bill retains the House provision of
taxes OF 3 per cent for h t~ransporta-
ton of freight, OF one cent for every
20 cents of express charges on parcels
and packages thus transported. of 8
per cen upon passenger tickets and
similarly s per cent. on Pullman tickets
OF all classes.
1t advances the tax rate on trans
p~ortation by pipe line from Ga per
cent, as in the House bill. to s per
cent.
Rates for telegraph and telephone,
cable and radio dispatches are exactly
as in the Hous bill.
Tax on insurance premiums is
virtually unaltered from the House
bill.
Under Title VI, Tax on Beverages
there have been changes from the
House schedules. Whiskey withdrawn
from bonded warehouses for beverage
purposes shall BE subjected only to
a tax of S6.40 a proof gallon instead
Of IS, while the rate of tax on with
drawals for other than beverage
purposes is reduced to $500 a gallon
instead of 81.
Reduced Taxes on Perfumes.
The tax on perfumes containing
distilled spirits Is reduced from $3.50