Evening journal., 1918-06-18
WAR Profits TAX OF
75 ?. {. FAVORED
Revenue Bill TO Call Tor
Average of Five Pre-War
Years IS Basis
ALTERNATIVE
METHOD ALSO

WASHINGTON. June is.-Hearlngs on
the biggest revenue bill ever framed by
any legislative body will end next
Thursday, and before the end OF ihe
month the Ways and Means Commit
tee Will begin the framework or the
measure TO be reported TO Congress
about the middle OF August The near
ings, Judged by the trend Of the 'lues-
tions asked by members OF the commit
Tee and the information obtained, have
developed that war profits, incohes'
luxuries, and non-essentials VIII bear
the burden OF the taxes, with the gen
eral public reached through propaple
indirect consumption tax on gross
sales.
II can be stated as fact mat the
present plans Of the Ways ana Means
Committee include tax OF - per cent
on pure war profits, which VIII ne ar
rived at through the English system Di Di
imuosing each levies. The normal prohl
will be obtained by taking the aNerdso
profit during the five pre-War years
1909. 1910. 1911, 1912 and 1913 All prof.
its over this average will be subject 10
a tax Of 20 per cent. ,-o ,
Investigation has shown that i'v Oh
the largest corporations in the uhlteu
states, now paying S5OO,OOOOOO on tne
basis Of capitalization. would escape
without any appreciable taxation il llle
English system alone were foioNe9'
In the years preceding the war SUCH
concerns as the Ford Motor Company
and the Standard oil Company, hepre-
sentative Claude .kitchin SAID, mao
greater profits than they were enjoying
now by reason Of price liking imposeu
BY the Government.
To overcome this the committee mas
decided 10 follow some such scheme as
that proposed by Secretary McAqoo'
the imposition OF two plans of taxation
one based on capitalization and the othet
on war profits, giving the Government
the option Of imposing the higher laA.
Income rates will be increased, nut u
e not probable that the exemption OF
81 600 and $1,000 on single and married
persons. respectively, VIII be loWereu
THE s,Irfaxes will be raised and tne
,,orroal fax increased from TO II per
cent on earned incomes, while those
enioving une9rned incomes, acciulhs
from clipping coupons and colectins
renis. will be taxed i6 per cent. II tiie
nresent tentative plans Of the commit
lee are adopled finally. In England uic
',.,,,e.,,od income tax is twice as much
a. the tax imposed on earned incomes.
The inheritance tax rates will be IN
.rooeed and the exemption OF Sz''uVo
-, allowed will remain unchaiseu-
'rbe nresent rate upon a net inheritsnce
~ $4,000 lafter The spcclhc eAelhpliv 10,
oe s25 .OOO) is , per cent, mahlns luc
tsx 1000. An estate OF So5OUyV psss 49,
s55 600. while an estate OF sl'oVV'oVV
PAYS $4,000. o,,,,
I'm roughly apporlioning the anlount
,hat must be raised from these three
sources OF taxation. the committee nas
estimated that fully 20 per cent. OF Olie
aggregate Of SS.O0O,OOOOO0O TO be ralseu
nv the new law must come from Wal
nroflls. incomes, and inheritance taxes
This percentage may be reduced as
,be committee proceeds, especially II l'
is eeen that an excessive war pronl laA
might result in iniuring business ana
nrevent the necessary business eA-
panion. s ,,,,urics
,.ilI como in for increased taxes. Inc
.a,,rnittoe has not vet decided how
heavily thev shall be iaNer. Inc pres
ent tax on automobiles Whicil y III
posed on the manufacturers VIII Du
creased slightly, members say VIM
the great problem before tneni y ~
roach what they dominate ihc iuNuIs
class the users OF motor cars. \ feu-
eral license based on The horse power
Of The car Is suggested, while ahoiller
Syav considered is the placing oi
greater tax on gasoline used Tor pleas
1re cars than gasoline used by com /
mercial cars. The latter system Wouia
make IL possible for an autonomous I
a. take himself out Of the taxable class