The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-05-16
URGES EXCESS
PROFITS TAX
Be RETAINED
Revision Discussions Given
New Twist When H. Archi-
bald Harris, of Chicago, Re-
views Situation.
ASKS LIGHTER SURTAX
fBv Associated Press.)

WASHINGTON, May 16.-rax re-
vision discussions were given a new
twist before the senate finance COM
mittee today by B. Archibald Harris,
of Chicago, who took positive stand
for continuation of the excess profits
tax and urged exemption of corpora
tion dividends from surtaxes.
He was the first witness before any
congressional committee at this ses-
sion to propose retention of the ex-
cess profits tax provisions of the pres
ent revenue laws.
The witness gave broad review OF
the tax situation, discussing also it's
relation to present business condi-
tions. He told the committee that in
his opinion it should direct efforts to-
ward reduction of tax free securities.
he believed thatNi means were found
to throttle the flotation of tax exempt
obligations by federal, state and local
governments, a long step would be
taken toward drafting capital back
into productive enterprises.
Urges Lighter Surtax.
In addition to the elimination Of sur
taxes on the dividends of corporations
the higher surtax rates on personal
incomes and a differentiation in tax
rates on active and pancive" invest
mentS.
He urged that there should be no
tax on dividends but that corporate
earnings should be made to bear suf-
ficiently high levies to provide the
federal needs from that source. RE
lease the tax on individuals even
though you strike the corporations
more heavily" the witness urged.
Then, tax the interest on bonds and
preferred stocks and other issues of
L passive income nature, by relieving
the tax on dividends. We are going
TO have a great clamor for stocks of
all kinds and the present bonds and
preferred stocks will be converted
into common stock, all of which will
be active capital"
Points Out Benefits
The changes proposed, Mr.. Harris
believed would make active capital a
s. better Investment than tying money
in tax free bonds. He added that he
it's productivity and believed strongly
that the suggested elimination of cor.
poration dividends from surtaxes
would aid materially in restoring the
country'S industrial health.
Fears of the treasury that it would
not be able to meet it's requirements
if some substitute for the profits tax
were not found, were declared by the
witness to be unfounded He asserted
that the auditing of tax returns for the
last three years would bring much
more money into the federal chest
than the most enthusiastic officials
had hoped.
Predicts Jump.
BY sitting the 1917 returns, the
treasury is shaking out around $35,
100000 a month in extra taxes, MIR
Harris said, and predicted that when
examination of the 1918 returns gets
under way, the income from back
taxes will jump to between $50, 100000
and s75,Oo0.O00 a month
This will mean." he added. that
between $500, 100000 and $3.50, 900,
900 in additional taxes will be assess.
ed in the next three years" Mr. Har
ris believed it impossible for the
treasury to complete the auditing OF
the 1918 returns under three years
His personal estimate of the added
revenue from back taxes was higher
than the treasury's figures, the wit
+ ness said, for he held that penalties to
/, be assessed would average 80 percent.
In the next three years. he said, the
government should receive between
s2,340,O00.000 and S5,276 100000 from
1918, which treasury officials have not
counted on as yet in any of their com
putations. Widespread or radica
changes in the revenue laws were op
posed by Mr.. Harris, who told the
committee that the country had al
ready suffered from too many switches
in the federal taxation policy.