The sun., 1918-08-17
WAR PROFITS
TAX IS SET AT
50 PER CENT.
House Committee Accepts
Treasilry's Suggestion, but
Changes Deductions.
FIXES o TO IL PER CENT.
Votes TO Permit Payment of
Income Levy I'm Three
lnStalmcnts.
FIXES @ TO IL PER CENT.
sn.oai DesrotcA 10 TuG suv.

W.sEtsGroN, Aug. 1.-THE Ways and
Nears Committee has accepted fully
the treasury Department plan for the
IMPOSITION OF a war profits tax of so
per cent TIE only remaining diffi-
Guilty is IN Strengthening out some Of
The details. This cxccS profits tax 10
Nnl in process OF modification to suit
both the committee and the Treasury.
In the Treasury plan for a war proflts
TAX. polished exclusively In THE SUN
Tuesday, II was provided that the gen.
srai prc-war earnings OF various kinds
u business In eight classlfications was
TO be the scale of how much should be
allowed for ordinary earnings before
putting the so per cent. tax on the bal
auce. This did not meet the full APP
prevail Of the committee and only three
clasSifcations are desired.
The Treasury wished to classify busi-
ness generally under manufacturing,
mining, mercantile. financial. transporta-
ton by land, transportation by water,
public utilities other than transporta-
ton and miscellaneous.
The Treasury suggested that within
these classihcations the greatest per-
centage of profits in relation to capital
TO be allowed should be IL per cent.
and the least per cent. This varying
scale the committee does not altogether
like either. Instead of the Treasury sug-
gestions the committee to-day tentatively
adopted the following plan. which has
been sent to the Secretary Of the Treas
ury for his approval:
Classification of business in three
classes as:
1. Mining and businesses generally
where the hazard of loss Is great.
.. Miscellaneous. including all sorts of
business except those classed in / and 8.
3 Financial.
The deduction from net income which
would be allowed before imposing the
SO per cent. war tax on the rest Of the
income in class by the committee
plan would be IL per cent. The deduc-
ton in class 2, where the hazard of
loss is not so great. would be 10 per
cent, and all sorts of business included
under class 3-financial-would be al
lowed a deduction Of only per cent
Final action on this plan will not be
taken by the committee until II hears
from Secretary McAdoo.
Income Tax ON Instalments.
important changes were made in the
bill to-day. one of them at the su6ges-
ton of the Treasury. This was to
change the provisions for instalment
payments OF income taxes. The new
plan is to require a payment of one-third
Of the tax when the return Is made. one
third within two months after this, and
one-third two months later, with no de.
@uction for payment Of the tax in full
When the return Is made.
The most important change in the bill
ana one which may not remain in the
bill was establishing a differential be-
tween earned and unearned incomes in
regard to the income tax. The present
normal tax of 10 per cent, with the ex-
emptions and the abatement agreed upon,
remains in force In respect to earned in
comes, but the normal tax on unearned
incomes was increased to % per cent.
The vote In the committee on this mo-
lion was very close. The exact vote was
not made public. but 1t is understood to
nave carried by only two votes Doubt
'1SS some effort will be made to repeal
this provision.
In defining WI 1t should be taxed as
unearned income the committee included
interest. reptals. royalties and similar
lnearned iucome. but for some reason
unexplained provided that dividends from
referred stock only and not common
sock should be classed as unearned in
One, one member reserved the right
make n motion on the floor of the
House 10 have common stock dividends
included
S',5OO.OOO More for Tax Collectors
The committee acceded to the request
NJ the Bureau of Internal Revenue and
provided S25.000.000 a year, an increase
or S'5OO.00o, for the better collection of
iiNeS, 1t also provided that Commits
Eoner Roper should have five deputies
Instead of three
The committee decided to provide for
"",'hs the names OF every one who must
make a return under the income tax
posted at the court house OF each county
Ycat
In connection with the committees
ntlion to-day In refusing to accept the
treasury suggestions for arriving at the.
proper deduction from net income to be
iI"Wtd before imposing the war profits
AK MI hltchin criticised the suggestion
81 Inc Treasury Department to give bust
ness concerns the option of a number of
pans under which to figure their deduc-
IONS These plans were published in
NE SIN Tuesday.
=, Following the suggestions of the
..edsury Department Mr. Kitchin said
nave figured out, would lose the Gov
eminent about $75O,00O,Oo in revenue"
Practically all hope of reporting the
"' Z" the House next week has been
ENch W, The best that is hoped for
low Is that It will be ready by the fol-
""'hS Monday, August 26