Evening star., 1920-01-11
FR;HT|SPEND|NG
40REPEAL TAX ON
20 EXCESS PROFITS

GNVIOO ] uV1 ~
Representative Copley Heads
Movement Which, He As
sserts, Will Aid Consumer.
flight to have all tax on business
repealed because it is increasing the
cost of living. strangling business mi
tiatfve and ambition and allowing big
business in one line to mass all its
resources to kill off competition in
some new line is going to be made by
Representative Ira c. Copley of 1lli-
neans committee. millionaire and
magnate in several lines of industry.
This may mean a contest on this is
sue wfthin the republican ranks, as
House Leader .Mondell. Chairman
Fordney of the ways and means COM
mittee and other leaders have de-
clared against repeal of the excess
pcofits tax. Boiled down to plain Ian
gaage. the republicans are afraid to
take OF the excess profits tax. al
though it is a consumption tax direct.
for fear this would cause yell from
the rank and file of consumers. So
| the republicans are for letting the
present tax ride and forcing the
democrats to carry whatever blame
| the people may he disposed to lay up
/ oo them for it in the coming election.
Cites "Three Great siistakes."
There are three great mistakes in
| this tax on business. Representative
|Cop1ey emphasizes:
| ~ 1t throws back on the consumer
the increa sing high cost of living. to
l the amount of about S35 per head or
generally this falls heaviest on those
families that can least afford it.
go 1t absolutely destroys oppor-
tynity and initiative for the young
business man of small or no capital to
Become a leader in industry.
(D 1t puts into the hands of great
concerns the ability to develop a COM
plete monopoly by taking from the tax
the government would levy $50 per
cent to be used in development, leaving
only Bis per cent to be paid by the
concern itself.
AS the very corner stone of his
reasoning Representative Copley lays
this axiomatic fact, 'All tax on busi-
ness is necessarily a consumption tax
handed on to the consumer and gen.
orally growing larger like the old-fash-
ioned SNOWFALL. With this tax on busi-
ness removed the government can step
I'M. he says. and lay it's finger on every
man who is a profteer.
Says Tax Must BE Reduced.
The tax on business must be re-
moved, Representative Copley told
his colleagues on the ways and means
committee and generally in Congress.
before the cost of living which now
Throughout the country, can be ma
terially reduced. He figures this way:
With $4,000 exempt. the small stores
are not suffering from the tax, but
the prices to cover their increased
costs The small stores follow the
prices set by the big stores and are
today making the profits. Before the
war the big concerns. by proportion
ately small overhead expenses in pro-
portion to the volume of their busi-
ness, were forcing the prices down
to crowd out the small stores. So
that today just the opposite condi-
tion obtains.
L Representative Copley points out that
today it cost about $3.50 per unit to
carry on business as against s100 in
1913 or 1914. The excess profits taxes
levied in 1917 were payable in 1918,
those in 1918 payable in 1919 and
those in 1919 payable in 1920. and the
upward trend of cost of living has
been in direct proportion to these
taxes on business.
Minimum Profit Allowed.
It is generally recognized in retail
business that there must be allowed
a 10 per cent minimum profit In good
years. With the tax exempting per
cent, the government then took so
per cent from business in 1918. pay
able in 1919, and allowing 20 per cent
to remain. but taxing that 20 per cent
another II per cent. Representative
Copley figures out that the normal
10 per cent profit had to be increased
to 25 per cent in 1919 to make the 10
per cent. Apply this on the Is cost
per unit necessary to carry on the
business and this causes the cost
passed along to the consumer to climb
to As per cent, as against the 10 per cent
a couple of years ago. The tax is
somewhat reduced for 1920 and prices
ought to follow, offering some re-
duetion over 1919.
He particularly cites also that the
repeated demands for wage increases
means that these increasing costs of
doing business must ultimately be
paid blythe consumer. For example,
the wage increase demanded by the
coal miners would be passed along
to the householder and to the rail-
roads OF steel mills using the coal.
The railroads must get it back on in
creased charges for freight haul, and
so 1t would eventually be passed
ta1ong to the ultimate consumer, with
interest on the investment always
aocumulating against the final prices.
Similarly, the steel men would pass
the cost along to steel rails to the
railroads or on structural steel to
the contractors, and every tenant in
every apartment house or man in a
business office would in the end have
to pay levy = heavier because it
passed through several hands-on the
GAd nf CT dyYa To IN,
creased wages to the coal miners.
Problem Is Presented.
But if the tax is taken off business
what Is the government going to do to
make both ends meet? Representative
lCopley. as a member of the ways and
means committee. knows that it's equiv
alent must be raised in some other way.
He says there is only one way, and he
says that is by taking from the indi-
vidual incomes an increased normal tax,
and that the sur-taX must be increa sed.
in explaining the evil of the excess
profits tax as destroying opportunity and
initiative of young men, so that young
man OF moderate or no capital may by
ambition and application to business be-
come captain of industry-'the one
thing that has done most to make this
a great country'-Representa CopIey
points, besides many others, to Edward
Ms Hurley. former chairman of the
IT roacidi Iidue SoI1lfHlSsIOn ana later
chairman of the United States Shipping
Beard.
He has put Hurley's life story into
the Congressional Record Hurley
was railroad fireman and lost his
job following the Burlington railroad
strike in 81 and 'SS. While a man
.ufacturer's. agent. selling supplies.
he became interested in the invention
of pneumatic tool and became half
owner. His first year in business he
made S32S to live on The second