New-York tribune., 1918-11-15
McAdoo Asks Bill
For $10,000,000, 900

us, have borne the burden Of the war,
and to their peoples, but is also the
policy of enlightened selfshness.
ut is to be apprehended that the
sudden cessation Of the extraordinary
demands upon our industry and prod
ucts, consequent upon the conclusion
Of the war, may result in sudden re-
duction OF prices and wages, and even
in unemployment, if we are not pre-
pared to continue to sell on credit to
the rxtent that NAV he necessary"
Taking up the public revenue bill,
the Secretary explained his views as
follows:
"Thc excess profits tax rates applica-
BILE to the calendar year 1913 should
not be greater than those provided for
in the existing law of October, 1917
and should be payable only in those
cases where such excess profits tax
would yield larger return than the
proposed war profits tax.
The 80 per cent war profits tax ap-
plicable to the calendar year 1918
should be retained. Contracts have been
made during past months in the ex-
pectation Of heavy war profits tax.
Every one is agreed that war profits
should be taxed. They must be taxed
now.
at is time to look ahead to the
future of American business and in
dustry. Our tax measures should be
so devised s to encourage and stimulate
rather than to burden and repress
them. |, therefore, recommend the i'm
mediate amendment of the pending bill
so as to provide that with the col
lection Of the taxes levied upon the
war and excess profits for the calendal
year 1913, and payable in the year 1919
the war and excess profits taxes shall
come to an end except in so far as many
be necessary to subject to these taxes
profits which though arising from con
tracts entered into during the war
period, would under existing regula-
tions technically be profits Of 1915 and
not profits Of 1913.
ut seems wise to provide, with the
elimination for the calendar year 1919
OF the war and excess profit taxes, for
sufticient revenue from corporation
and individual income taxes applicable
to the calendar year 1919 to make the
total revenue payable during the cal
endar year 1920 not less than $4,000
100000"
Basis Should Be Set
After citing the necessity of "ade-
quate provisions for annexation. con-
servative valuation of inventories and
the ascertain nment of the minimum in
come which shall be exempted,' as ap-
piled to war and excess profits taxes,
Mr.. McAdoo said:
II cannot overemphasize the i'm
portance of determining now the basis
Of taxation which will apply to the
calendar year 1919. as we'll as to the
calendar year 1918. Business and in
dustry and individual initiative and en-
terprise are entitled to know in ad-
vance the basis of taxation upon which
all the activities of the nation must
be conducted. Prosperity cannot be
maintained if business is kept in un-
certainty as to taxation.
ut is always unfortunate to be COM
PEELED to enact tax bill at the end
of the calendar year with retroactive
effect instead of in advance of the cal
endar year, which would permit con-
tracts and business arrangements gen
orally to be entered into with certainty
as to the burden of taxation to be
borne. This is a gross injustice to
business and to all forms of enterprise.
1t is costly also to the people at large,
as they are required to pay higher
prices for their necessities. because
producers, in order to be on the safe
side, fix prices on the assumption that
taxes may be higher than they sub
sequently turn out to be.
'Dehniteness and certainty as to the
basis of taxation shou d be given in
the pending BILL not alone as to the
calendar year 1918, but as to the calen-
dar year 1919. This will enable bust
ness and enterprise to proceed with
confidence and courage