The Birmingham age-herald., 1918-06-07
Local Data
McAdoo Wants Eight
 Billion Dollars by Direst
 Taxes Under New Bill
tContinued from Page one)

high rate be levied upon all war profits. This tax should be superimposed upon the existing excess profits tax in such way that the taxpayer should be re- uuired to pay whichever tax is the great CT. The existing excess profits tax should be amended in certain important partlc- ulars so as to remove inequalities.
 .s. That there should be a substantial increase in the amount of normal in come tax upon so-called unearned ln- comes Under existing law earned m comes above certain exemptions are taxed 4 nor cent as an income tax and per cent s.s an excess profits tax, making total of F per cent, while unearned ln- comes. derived from securities, etc, are taxed only per cent. The per cent tax should be recognized an income tax and the rate of F per cent 0 per cent normal and per cent excess prohts) should be retained in respect to earned incomes, while higher rate than Lz ner cent should be imposed on unearned incomes.
 A That heavy taxation be imposed upon all luxures"
 Explaining his ideas for a new tax to reach actual profits made out or the war, MT McAdoo wrote
 "The existing excess profits tax does not always reach war profits The rates of excess profits taxation are graduated and the maximum is 60 per cent ln Great Britain there is flat rate or oo per cent on all war profits. The govern ment departrnents under great pressure as they are to get necessary war mate- r;als and supplies with the utmost ex- petition, cannot in the nature or things fix their prices nor guard their contracts in such a way as to avoid the possi- bility of profiteering. The one sure way is to tax away the excessive profits when they have been realized.
 SHOULD HAVE PROFITS
 "Of course, no one objects to reason able profits; on the contrary everyone should want and l am sure uoes ala hrsiness and enterprise to be reWafueu
 with reasonable, or even liberal profits. Prosperity should be preserved and can he Dreseryed, I believe, on the basis or reasonable profits" The way in which higher normal rate on incomes would promote the | sale of Liberty Bonds, particularly 10 persons of big means, was explained as follows: further to increase the interest rate on government bonds The number of SUD- sc,ihers to the three Liberty Loans aggregated 3o,00o,000. The people who subscribed are impatient of those who have not. Various plans have been uroed upon me for forcing the people to buy Liberty Bonds. There IS popular demand also for hlgh taxes upon war profits. There also is ' popular demand tha- all the peopie ] sbouId contribute to financing the War '..rbere should therefore, be a sub s+,ntial increase in the normal income tax rate and a higher tax should pc levied upon so-called unearned tnai, on earned incomes. Income ueri'eu from Liberty Bonds would be exenip' fro-, this taxation and the relation oe- tween income from Liberty BohoS anu income from other securities Wouids pe readjusted without increasing the ra.s of interest on Liberty Bonds. It weulo oat fax the patriotic purchasers ol Tjbertv Bonds on their holdings, pu' | if would weigh heavily upon the shirk l CTS who nave not bought them. II would make the return from Liberty | Bonds compare favorably with the re- | turn from other securities.
 ON CORPORATE INVESTMENTS There is another feature deservlne | consideration. There is natural rec. l ing among the masses of the peopl' that taxation upon incomes and 'ipof war profits should be high enough tf bring the return from corporate Tn vestments more nearly on parity WILT ] the return from government bonds the government should not be forced te compete for credit with war industries which are profting abnormafly ane
 which, unless restrained by the exer- else of sound and just taxation. vii constantly add to the difficulties ot tht reople of the United States in their CT | fort to supply the government al reasonable interest rates with tht credit it needs to fight successfully l this war for lberty.'' | Not to increase the sum to be raised l by taxes next year. and consequently to raise twenty billions from govern ment bonds, said MT. McAdoo, "woult he a surrender to the policy of higf interest rates and imitation. with al the evil consequences which woult 1 flow inevitably therefrom, and whicf
 would, I firmly believe, bring ultimat' disaster to the country"
 Trea sury tax experts are at wori
 now drafting plans for removing som'
 of the acknowledged injustices Of th'
 nresent excess profits measure, apply
 ing particularly to business with snal
 capitalization and consequently higl
 rates of earnings Suggestions TO
 fN