The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-10-30
TAX BILL EQUALIzES
BUSINESS BURDENS
Partnerships and individuals
Placed on Same Footing
With Corporations.
KITCHIN MEASURE SHIFTS
Finance Committee Also
Adopts Rates for Life In
surance Companies.
Special DespdtcA TO THx sux

I opcctuf Despdfch TO THE Sun.
| WASHINGTON, Oct 2s.-A radica,
change in the Kitchin revenue bill wa.
effected by the Finance COMMITTEES 70.
day by making individuals and partner.
ships engaged In business in which ther.
! Is capital invested subjected to the war
! excess profits tax.
1t was the sense OF the majority o,
! the committee that this was in effect n
discrimination against corporations, az
| they are subjected to both the incoms
tax and the profits tax. while partner.
ships and individuals engaged in like
business and making similar pronu
have been subject only to the individual
income tax rates. The decision of tn.
committee does not mean that the detail.
OF the plan cannot be revised.
Inc change was made In this way:
TO the war excess profits schedule
another bracket was added. applicable
only to partnerships and individuals,
which adds to the ordinary war excess
pronts tax sum equal to IL per cent.
OF the amount by which the net income
exceeds $4,000 plus the amount Of tho
tax computed under the first. second
and third brackets Of the war excess
profits schedule. This was done TO
balance the IL per cent. normal tax paid
by corporations after the war exces
profits tax is deducted from their net
incomes.
How the Tax Works Ont.
1t was agreed by the committee that
the amount Of tax paid by the members
OF q partnership or an individual should
nrAAtf III
tax and the individual or partner will
be required to pay as an individual in
come tax only the difference between
what would ordinarily be his income
tax and the war excess profits tax
TO illustrate how this Won ID work out
members OF the committee submitted
this example: A corporation with an
income OF 100000 and a war excess
profits tax of $4,000 to pay. Under
the same circumstances the war excess
profits tax of a partnership would bs
S+6.s6o. but this amount divided among
the partners would be deductible from
the income tax assessed against each OF
the partners
This puts partnerships and indivd.
uais engaged in business on exactly the
same basis as corporations with the e1-
ception that corporation dividends when
distributed to stockholders are liable 10
tax under the individual supertaxes as
sessable to each recipient of individuals
and partnerships having capital invested
which Is not material revenue pro.
uucing FACTOR. or II there is only a NOM
mai capital invested need not pay taxes
under the war excess profits section OF
the bill. and corporations whose main
receipts are in salaries and professional
fees and similar income may elect 70 ba
taxed on the same basis as partnership,
and individuals. in which case they Will
De exempt from payment OF the war ex.
cess profits tax
Rates for Life Insurance Cos.
The rates OF taxation on life insurance
companies were adopted by the Finance
Committee to-day also. They provide
that the tax shall be as follows:
In the case Of domestic life insur.
ance company, IL per cent. of its ne, in.
come.
In the case of a foreign life insuranc.
company. IL per cent. Of the same pro-
portlop OF the net income which the "a
serve fund upon business transacted
within the United States is OF the total
reserve fund upon all business trans
acted within or without the United
States
For the purposes of this law net IN.
Soio was OeHNeQ dS the gross income
minus:
(a) An amount equal 10 4 per CEN.
OF the mean OF the reserve fund -.
quired by law and held during the tax
able year. but not less than the mean
or the amount OF interest paid, which Is
exempt from taxation.
CD Investment expenses paid during
the year, but not more than one quarter
OF one per cent. OF the average in.
vested assets
Co Taxes and other expenses pad
during the year exclusively in connp--
ton with real estate owned by the COM
pany not including taxes against local
Dement'S or any amount paid out fo-
new buildings or for permanent I'M
provements to the property OF the com
pany.
ca In the case OF a domestic com
pany. $4,000.
In order 10 arrive at the meaning Of
net income gross income was deemed
by the committee to mean. 80 FAR ~
ire insurance companies are concerned.
interest. dividends and rents received
during the taxable year
The life insurance section as written
by the Finance Committee provided that
any amount paid out by an insurance
company on policies issued afte~ Ia'-
uary l last should be credited toward
the payment OF the tax