The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-05

Conservative Estimate OF
Revenue Loss From This
Source Is Placed at
$9OO,OOO,OOO.
HOW TO MAKE 1T UP
Three Suggestions Offer an
Expected Total Of 1885,
100000 Toward Fill
ing the Gap.
COULD BOOST NAIL RATE
Stamp Assessment and In
creased Excise Tariff Among
Other Plans Committee
Will Consider.


tchich ,oal make plain the erdct condi-
tion of affairs at Washington, together
,cith the prospects for the future
These articles lcill deal 1oith specific
features of the general situation and
,oith departmental conditions as aceH
The article published herewith has to
do aoith the ercess profits tdT. To-
mtofTotc's article tciH haze the gen.
erdl fiscal situation as its subject. The
articles iDitI be published erery day
until the series is completed.
Special Despatch to THE New YORK HERALD.
WASHINGTON, Dec. 4.-Every discus
sion one hears here of the taxation
revision programme Of the Govern
ment appears to revolve around the
expected early repeal of the excess
profits tax. There are some whose
opinions are worthy Of earnest con-
sideration who maintain that IL for no
other reason than because Of its very
name the excess profits tax should re-
main on the statute books. But these
persons appear to be in a hopeless
minority. The sentiment, in so far as
1t can be gathered in advance of the
actual debates, seems to be over
whelmingly for the abolition of this
tax.
Secretary of the Treasury Houston
has Joined with former Secretaries
McAdoo and Glass, the three Treasury
executives who have been charged
with the administration OF the tax, m.
recommending it's repeal. But the re-
lection of an item of revenue re-
ceipts from which for the current
fiscal year have been estimated at
$1,000, 100000 demands careful consid-
Grafton, particularly of the substitutes
proposed to stop the financial gap.
The opinion, however. is general that
the revenues from the excess profits
tax for the next fiscal year, provided
the tax remains in effect, will be far
below, possibly not more than half of,
the estimated returns for the current
year.
Excess Profits DisnppcarinG.
Excess profits have dwindled. II not
uiSdPPtdIt tu tltitlss III lnt ldol tdI III
industries from which IT, greatest con-
tributions were received For this rea-
son, and also because Of 10 pretty gen.
eral belief that the tax itself has been
one of the greatest incentives toward
extravaganza. the billion or more dol
lars of paper loss incurred by its repeal
is not viewed with alarm.
Among the chief reasons put forward
for the repeal of the tax arc:
Lit is too complex and difficult of
administration. The time con-
sumed in arriving at a Anal determina-
tion OF many Of the returns Is too great
and produces an uncertainty in the
business world which should not exist
Ut has encouraged extravaganza I'm
business management by creating
the idea that almost any expenditure
was warranted because. in reality. from
so to 50 per cent of such expenditure
was borne by the Government.
At requires so much information
and data from the taxpayer that
a feeling OF hostility against the tax
readily arises and further complicates
its administration. So much uncertainty
may exist concerning the final amount
OF any dsSeSSfnenI lnat frequently Wnen
evasion Is charged the trouble may lie
in different construction OF the law
rather than in any attempt to defraud
the Government.
a 1t discriminates between different
forms of organization which may
be found in almost any industry. IL
penalties the more conservative business
corporations and puts a premium upon
those whose capitalization had been In
hatcd prior to 1917.
E--It unjustly intimates that any
pront OF corporation in excess of
8 per cent. is excessive. tending thus to
create a dangerous social implication I'm
the public mind.
6.-The definition OF invested capital.
upon which its exemptions and
rates are based. is unsound. II ignores
real value which has been created by
conservative business management. and
excludes appreciation which may be due
thereto.
Its productivity is constantly d.
minishing and the future yield is
too uncertain to permit IL to be relied
upon as a definite means of producing
q given amount Of revenue.
Income Tax Modification.
The above reasons briefly set forth
the findings OF the tax committee Of
the National Industrial Conference
Board with regard to the excess profits
tax. The committee had as advisers
such authorities as DR.. T. s. Adams.
Col. Robert II. Montgomery. A. Il. Hol-
comb. J. F. zoller. Otto II. Kahn,
George Il. Holmes and Professors Fair
Continued on Ttoentv-second Page.
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