New-York tribune., 1918-08-25
Kitchin Expects Passage Of
So, O0O,OOO,OOO Tax Meas
ure in Quick Time
Excess Profits Will
Give u. S. 3 Billions
Committee Agrees On Rate
of 20 Per Cent on Gains
Over 20 Per Cent

WAot1lNG ON, Aug. Z4.-Ihe SS,OUO,-
100000 revenue bill providing for the
greatest tax levy in the history of the
United States will be agreed upon
finally by the House Ways and Means
Committee Monday, reported to the
House Thursday and brought Up in the
House for consideration Monday, Sen
tember 2.
inns programme was announced to-
night by Chairman Kitchin of the
House Ways and Means Committee
with the prediction that the House will
pass the bill after weeks considera-
ton.
Final estimates submitted to the COM
mlttee by the Treasury experts made
1t unnecessary to contemplate the ne
cessity of resorting to consumption
taxes or any new devices or plans for
raising additional revenue beyond
those already in the measure.
These estimates give S8,100,0OO 900
as the total probable annual yield of
the bill as now framed.
Incomes to Raise Two Billions
The excess profits schedule, agreed
to at meeting to-day, will provide
the largest amount of revenue, esti-
mated at $4,000, 100000. The income
tax, both individual and corporation, Is
expected to yield S2,400,O 0,O00,000; the
estate or inheritance tax, S110,000O0o;
beverages, including liquors as we'll as
soft drinks, $1,1Oo, 100000; tobacco,
cigars and cigarettes. $3.50, 900; au-
tomobile manufacturers tax. $125, ,00o,-
600, and users of automobiles and mo-
torcycles, 100000. Other items, in
cluding luxuries, make up the balance.
After 8 per cent deduction and $4,000
specific exemption there is a 35 per
cent tax on excess profits over the ex-
emption and up to Is per cent, SO per
cent on all between Is and 20 per cent,
and 70 per cent tax on all above 20 per
cent of profits Provision was made to
avoid undue hardship to small con-
Germs.
is prov ded with the alternative war
profits tax already agreed upon of 80
per cent fiat, whichever yields the
greater return to the government to be
imposed.
Pre-War Average Fixed
The excess profits tax is one upon
profits in excess of a given return
upon capital, while the war profits tax
is levied upon profits in excess of those
realized on an average of the pre-war
years of 1911, 1912 and 1918.
The former, which falls less heavily
on large than on small business, be-
cause big business is generally over
capitalized and small business under
capitalized, according to Secretary Nc
Adoo, taxes all excess profits at lower
and graduated rates, while the war
profits levy taxes all profits at one high
rate
The Treasury and the Ways and
Means Committee agreed upon the flat
so per cent tax upon war profits, but
differed on excess profits. The Treas
ury sought to have the lower gradu-
ated rates Of the present law retained
while the committee originally pro-
posed rates as high as 40 to 60 per
cent.
The war profits tax issue subject to
the fat 10 per cent deduction was pre-
viously agreed upon by the committee.
Small Concerns Helped
To safeguard the small concerns
against too great a hardship the bill
provides that corporations having not
exceeded S25 900 invested capital shall
not be taxed more than 35 per cent on
their net income. while concerns with
not exceeding $4,000 capital shall not
be taxed more than 40 per cent on
their net income.
AS the bill stands day it provides
for normal income tax Of 10 per cent
on all above $4,000 and provision that
unearned incomes shall pay 13 per cent
normal tax
Caroo;ct'e RoJv Aebo~o