The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-05
EXCESS PROFIT TAX
REPEAL PREDICTED
Continued from First Page.

child of Yale. Seiigman and Haig OF
Columbia. and Kemmerer of Princeton.
In addition to the abolition of the ex-
cess profits tax. the conference boards
committee will recommend modification
of the Individual income tax that will
result in still further reductions Of rev.
enues estimated at s280.000.000. These
are:
I That saved and reinvested income
of an individual shall be deemed
to be at the top OF the individuals net
income. but the surtax applicable to be
reduced to 90 per cent. II In excess of
that rate Estimated revenue loss
$3.50, 600, 900.
. That an individuals net loss for
any year be deducted from his in
come of the succeeding year. or of the
preceding year TO the extent that the in
come of the succeeding year is insult
ficient. Estimated revenue loss $780,
900, 900.
Conservatively estimating the prob
able returns from the excess profits tax.
applicable to the next fiscal year, at
s90O, 0O0 900, its abolition. together with
the other recommendations, would re-
suit in a total gross reduction OF rev.
enue amounting to $1,1S0, 100000. This
would. however. be partially offset by
the estimated increase in the yield Of
the existing 10 per cent. income tax on
railroad corporations. and the taxes on
transportation, which, considering the
increased rates in effect. will. 1t is es-
timated. yield s14s.0oo,0oo. This would
leave a total net reduction of $1,O32.-
100000 in revenues with the excess
profits tax abolished.
Many suggestions are put forward to
make UP this billion dollar deficit and
1t is upon these, rather than the pro-
posal to abolish the tax, that most diff
ference of opinion Is apt to develop.
These range all the way from specific
taxes on such commodities as tea. cof-
fee and sugar and other more or less
nebulous plans. to the more definite
proposal for an increased corporation
income tax.
They also include suggestions for
some sort of gross sales tax, to be ap-
Piled either against every turnover or
upon the final sale. They include also
suggestions for a return to three cent
postage for first class mail and an in
crease in the documentary stamp taxes.
With regard to the proposal for an
increased corporation income tax 1t Is
pointed out that in order to avoid dis
elimination between corporations and
the large number of individuals en-
gagged in business either as partners or
sole proprietors. some compensatory
tax must be levied upon corporations to
offset the surtax which the individual
must pay upon the portion OF his In
come remaining in his business.
The most definite partial substitute
yet suggested for the excess profits tax
and the reduced surtax is an increase
In the corporation income tax from 10
to 16 per cent, except in the case of
public utilities subject to regulation. and
abolition of the 5000 exemption, the
benefit of which is usually spread over
a number of stockholders and the ef-
feet of which Is regarded by the pro-
ponents of the suggestion as negligible
The estimated increased revenue yield
from this source is $3.50. 900. 900.
An examination of the stamp tax
schedules of the revenue act Of 1913
show that they have been taken almost
bodily from the revenue acts of the civil
war and the Spanish war. with few ma
terial changes In rates. One notable ex-
ception Is the exclusion in the existing
revenue act of the stamp tax on checks.
which was strenuously opposed by the
smaller banks throughout the country.