The Richmond Virginian. (Richmond, Va.) 1910-1920, 1918-08-15
M'ADOO INSISTS.
WAR PROFIT TAX
MORE EQUITABLE
Excess Scale Would Re-
duce All Industrial In
comes to Level.
EXPENDITURES BIG
Cost of War Exceeding
All Estimates and
Will Continue to
Increase.
EXPENDITURES BIG

Washington, Aug la.--Seere'ar
McAdoo told the ways and means
committee today that II Is not onN
,ynperative that the new revenue Oh
shooId impose a heavy tax upon wal
profits. hut that the bill should pe'
.oue law before the beginning Q,
lhe next liberty loan campaign Oh
September IS,
The expenditures for war pnf-
noses. nc informed the comfnH
tee. have exceeded all e~hhnaS'
and by January of next year tne
monthly increase, Wnich mas 49,
SloG .oo0. 900, during the present
fssc.f wear. will he very mucn
rrra,er. At the time the original
cs,tns,e was made. calling Tor
reyen.r bill of 50, 900 .OO0. 600 ex-
penditures were lower than they
arc now, and present conditions'
In the light OF information IN the
bands nf the treasury department.
make Il necessary that every cent
mn to the $4,000. 900 900 figure
should be obtained
peviewiur the controversy between
ME treasury and committee over ths
war profss and excess PROFITS rates
sarrstarv McAdoo said that the ais
t,ncttou is not matter OF FORM uu'
~ suhstanee. He declared that tns
I NJ profits tax should BE- 20 hfgn ID \.
y1n one would be permitted 20 mas
any profit out OF the war, Secretafs
McAdoo saidY
War Profits Tax.
aRy a war profits tax we mean
.ax unon profits In excess OF those
realized before the war. BY an ex'
ress profits tax we mean a tax upor
profits i'm excess OF given return up
m rapita, The theory OF a war
uroffts tax In to tax profits due 70 the
war. The theory of an excess pron.'
tax is 70 tax profits over and above
given return on capital. war prohts
tax fnds its saction In the CONVICTION
Of nj, patriotic men of whatever eco
nou,ic or political school. that no ONE
should profit largely by the war, Inc
excess profits tax must rest upon ths
wholly indenfensfble notion that u u
n function of taxation to bring Al
nrafats down to one level with rela-
tscn to the amount OF capital invest
cd ard to deprive industry. foresight
aid saracity of their fruits. The ex.
ress profits tax exempts capital and
burdens brains, ability and energy
The excess profits tax falls less heav'
ily on big business than on small bust
ness. because big business Is general
IN overcapitalized and small business
Is often undercapitaiized.
The war profits tax would tax al
war profits at one high rate: the ex'
cess profits tax does. and for safety
must tax all excess profits at lower and
graduated rates. Any graduated tas
upon corporations is indefensible In
theory. for corporations are only az
gregations of individuals and by such
4 tax the numerous small stockhold'
ers OF 4 great corporation may be tax
ed at a higher rate than the very
wealthy large stockholders OF re-
iatively smaller corporation. The OBJ
ject OF a graduated tax should be e
make taxes fall upon the rich who are
best able to pay them, the reverse re-
suit.
Additional Sourccs
But, though these great defects In
The excess profits tax lead me very
strongly to recommend that you should
peek additional sources of taxation In
the war profits tax and not In an in
crease Of the excess profits tax. have
from the beginning favored the con-
tinuance OF the existing excess profits
tax with the inequalities and injustices
remedied because this IL not a tins
when the treasury can be considered
to dispense with any existing source Of
revenue, Rather. 1t 10 my duty to
point out to you additional sources OF
taxation.
As i have already indicated. am
opposed to increasing the excess profiti
tax. This does, not mean that think
the existing excess profits tax cannot
be improved. On the contrary. have
indicated from the beginning and re.