The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-11-16
MeAdoo's Plan to Sop War and
Excess Profits Taxes.

In Secretary McADoo's reeemmen-
dations to Congress Of an immediate
cessatioB Of taxes on the excess profits
of industry and business, even on war
profits, there Is more economic wis
dom than will be apparent to the
casual glance. There Is as well a
horse sense essential in eli practical
problems but conspicuously absent
from some prominent tax layers OF
the present Congress.
We say the immediate cessation OF
such nxes because what the Secre-
tary proposes IL that they shall not
Apply to any business done after the
3lst day OF December. 1915. Taxes Of
that kind would be payable next year
only 90 the business already done In
this year Of 1918, now near its close.
II 70 10 be observed, Furthermore, that
" these recommendations are fulfilled
ordinary industry and business will be
doubly benefited. as follows:
Corporations, partnerships and indi-
y1duals that have been making I'M
usual profits already have set aside
from their earnings the taxes they
expected to pay under the preposter-
ous Kitchln schedules recently enact
ed. Not only are tlese tax funds In
hand. but, because the actual taxes
inyable on excess profits Of ordinary.
not war business, will now be lower
than they estimated, all those moneys
will not be paid out to The tax collect
or. Again. instead Of having to pay
next spring these lower taxes, the tax
payers will be able to distribute the
payments over the coming year. This
will give them the use Of some Of their
tax funds during months Of trying re-
adjustment In which ready cash will
he a precious thing to have.
In this economic crisis, therefore,
industry and business are treated by
Secretary McADoo as the foundation
not merely Of Federal taxing and
spending but Of the income Of the
nation, the earnings OF the workers.
the bread and butter Of the individual.
II was always economic madness
90 hunt industry and business, as the
Kitchins would hunt them, into the
last ditch. To drive a knife into the
heart of the bird that laid the golden
egg was always a peril frst to the
Treasury, then to all. Now Sec~o'ary
McADoo lights the lamp Of e fol
American industry and business
which, for the time being, are anxious
mariners on q fog wrapped sea.
And 1t is the horse sense of McADoc
which sees that in this swift and VIC
lent readjustment which has burst
upon the Industrial world the ques
tion Of the moment IS no longer IN
ordinate war gains. no longer excess
profits on war business or peace bust
ness; the question Is Just plain profit:
any profits at all. The problem
with which this country Is now fac,
10 face Is not how to pay taxes or
huge profits. 1t is how to keep bust
ness from going on the rocks.
OF what earthly use could be rev
enue statutes providing for taxes OF
excess profits with no excess profits
left In the country to be taxed FOL
war or any other purpose? Score
tnry McADoo's brain was not confused
on that subject. The real problem
the crucial problem-to sustain ordI
nary business-was in his minds ey(
as quick as a fash. And yet we ven
ture to say that II Secretary McADot
has cut some Of the ground from I'm
der the feet OF the spenders he ha.
not cut enough.
The man to whom all the bills com,
naturally Is concerned over whether
there will be az his command thu
revenues with which to pay the bills
From the point Of view OF his owl
official responsibility he would rather
have too much than too little. New
ertheless, 1t seems to us that his es
innate of what need be spent between
now and the end OF next June II
cleaning up the war is higher thar
the controlIable facts Justify.
IN estimating anew the war cos
for the fiscal year at $4,000, 900. O0
Mr.. McADoo appears to allow an ay
srage Of more than $1,000, OOO.O 600 ,
month for the next seven and a hal
months But the whole twelv
months Of the fiscal year were to ay
erage, on war basis. $1,000 O0O, 90
month-$24, 900, 100000 year
Then, with no superlatlve destruction
of material any longer going on. VIII
In the name Of economy should tn
remaining seven and q half month
tl,4easa