New-York tribune., 1919-01-16
Section Sure to Become
Law, but Opponents Say
1t Is Unconstitutional
Whole Bill Gone Over
But Many Sections Adopted
Measure Expected To
Be Passed in February
Ncic York Tribnn :
Washington BureG L

Washington Bureau
WASHINGTON, Jan. 15.--The Sen
ate amendment placing 10 per cent
net profits tax on the product of child
labor entering into interstate COM
meree. designed to take the place of
the child labor act recently declared
unconstitutional by the Supreme Court,
was adopted to-day by the conferrees
on the war revenue ulll.
The child labor amendment action
is of great Importance, as it seems to
make it certain that 1t will become
law. Opponents of the measure de-
clare that the present form is also
unconstitutional AS it imposes tax
of 10 per cent of the net profits in
addition 10 all other taxes on indus
tries employing child LABOR. it will be
prohbitive in effect on such bust
nesses.
In to-day's work the conference COM
mittee agreed to substantially all of
the Senate amendments The Senate
prevailed in regard to its amendment
restoring the first class letter postage
rate to two cents an ounce beginning
July i.
Some Changes Made.
The special license taxes are covered
in Title x of the bill and were very
considerably altered by the Senate.
For example the Senate changed the
House provision of a tax of 81 on each
thousand of the average capital in
vested in q business to a tax at the
same rate on the amount of the ne.
assets in excess Of $1,000 The Senate
also excepted life insurance and mu-
tual insurance companies from its ap-
plicaton.
The Senate reduced the tax on
brokers from 800 10 $40 and excused
exchange memberships from sny spe-
ciai tax il the membership is not worth
$4,000 or more. Above that value the
tax IS the same as in the House bill
that is, 500 un to $4,000 and $3.50 over
that figure. The tax on ship brokers
and customs brokers was reduced from
$50 to $40.
The tax on theatres. concert halls
etc, was not changed, except that a
number cf exceptions were made The
circus tax was reduced from $500 to
500.
Taxicab Section Changed
Tie taxiceb tax was reduced from
business to $40 per annum on each car,
and sightseeing automobiles were put
in class by themselves with q tax OF
SIC year, instead of 10 per cent.
The Senate changed the tax on to-
bacco manufacturers so that they shall
pay flat tax of $24 and limits the
House rate of 16 cents per l 900 pounds
to the excess of annual sales over 200,-
600 pounds.
IL, {
and Senate in regard to the advisory
tax board is that the House made
the board independent of the Treasury
Department to a large degree by pro-
vlding that It's members should be ap-
pointed by the President The House
also fixed the salaries at $4,000 and
prescribed that there should be five
members of the board.
Inc statement was made by repre-
sentatives of Philippine business inter
ests that the pending revenue bill will
be ruinous to Philippine corporations
whose business is largely with the
United States. Porto Rico business in
terests also complain that the bill, if en-
acted into law. will deal a serious blow
to the already depressed business OF
that country.
Classed as Foreign
The bill classes the Philippine and
Porto Rico corporations as foreign
and they therefore have to pay the ex-
ira taxes imposed on such corporations
In number of instances. The Chief
grievance, however, is that American
corporations or Philippine corporations
whose business is chiefly with the
United States are actually discriminate
cd against. The situation has beer
explained to Senator Ledge, Of ths
Senate Finance Committee. and Repre-.
sentative Kitchin. chairman Of the
House Ways and Means Committee, but
little hope is held out of altering the
bill to meet the situation.
1t appears that q Philippine corpora
tion has in the first place to pay thf
per cent income tax imposed in the
islands. Then on that portion of it.
business that is transacted in Unitef
States markets it is subject to the l.
per cent normal income tax by tn,
present bill and possibly also to tn,
excess profits tax
A Spanish or Japanese corporatio7
has to pay only the per cent island.
tax The effect is to penalize trad,
relations with the United States am
to Offset the special favors granted tn,
Philippines in tariff legislation. Tn,
situation IS much the same with an
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