The New York herald., 1921-07-27
EXCESS PROFITS TAX
Will H;E ELIMINATED
in new REVENUE BILL.
Congress Leaders Outline
Features of Measure to
Raise $4,000 100000.
SALES TAX ABANDONED
Transportation and Sur
taxes Lowered -Consump-
tion Levies Dropped.
HIGHER, LIQUOR RATES
Increased Postage Fee and
Bank Check Assessment
Arc Not Favored.
HIGHER LIQUOR RATES
Special Despa ten to THE NEW YORK HERALD
New, York Herald Bureau.
1vAshlngtoa, d. c., July 30.

VAshingtca, ID. c., July 2s.
"A tentative draft Of the new tax BILL
which probably will be before the
House within month, has been
drawn by members Of the House Ways
and Means Committee after consulta-
ton with the Treasury Department
and leaders of both houses Of Con-
gress. it wa learned to-day.
Republica MS OF the committee and
the Treasury experts are said to be in
virtual agreement as to the general
plan Of ttsi new tax bill. From au-
thoritativc sources 1t was learned that
tho following will be the outstanding
features In revenue revision, as pro-
vided In the House bill:
The sales tax proposal has been
ABANDONED.
The aEcess profits and several Of
the petty. annoying consumption
taxes vii be repealed.
The higher surtaxes will be re-
duced SO that the highest rate on
big Incomes will be about 40 per
cent. instead of e6. as at present.
Tho corporation income tax will be
changed 10 q nat rate OF 15 per cent.
as a substitute for the excess profits
levy. -
A. 10 per cent levy on the undis-
tributed : earnings of corporations
probably, will be imposed an q means
of preventing any large issuance Of
stock dividends!
/. Transportation taxes probably will
be eliminated or at least cut, In half.
Taxes on estates. insurance. to-
hAx Siemf mi ia
\ theatres. &C.. club dues, Some lux
uries and the majority of, the stamp
ta4ss win be continued AZ at pres
ent.
The tax on liquors for medicinal
and Industrial purpo0es probably will
be increased from $3.50 to $40 .
gallon.
Incone Tax Stands.
|, The suggestions that q tax be placed
on bank checks and that the postage
rate be increased to three cents are not
favored
Some members favor reducing the
normal income tax rate from to per
cent. but the general opinion Of the
Ways and Means Committee seems to
be that in view. Of the great need for
xevenue this reduction cannot be made.
Under the taxes as outlined the COM
nittee has received preliminary esti-
mates that more than S3.ooo.ooo.ooo
can be raised. This. added to the
$3.50, 900. 900 to be obtained from the
new tariff law and the $500. 600. 900 re-
ceived annually from postal receipts.
would bring the total revenues up to
the $4,000. 900. 900 mark the goal set
for the next year or two.
From authoritative sources the re-
turps under the probable ievies. were
ascertaIned.
From the normal income tax at per
cent. and the reduced surfaces about
81, 900, 100000 a year can be obtained.
A flat corporation income OF is per cent.
will return at least $3.50. 900. while
about $500. 900, 900 could be obtained
from the 10 per cent. levy on the un-
distributed earnings OF corporations.
This latter return would come either
directly from the tax or through in
creased returns from the forced d!stri-
button of cash dividends.
other Estimated Returns.
From inheritance taxes about $780,
900 600 will be received. while Ss7.ooo.-
600 will come from insurance levfes.
Should the transportation taxes be re-
pealed the loss would be about $780,
600. 600. Although the plan Is TO repeal
the taxes on fountain drinks and Ice
cream. the ievies on other beverages
would return about $1b7,ooo.ooo. The
present taxes on tobacco, which prob
ably will be continued, are yielding
1895. $50, ,00o. Another ts5.ooo,0oo Will
come from continuing present taxes on
admissions and club dues
In tho excise section OF the bill II IL
believed the taxes on candy. chewing
gum. cough drops. toilet soaps. wearing
apparei. with the exception Of some
Iuxuries. carpets. perfumery ana me-
dicinai preparations can be repealed.
leaving ievies on automobiles. jewelry.
pianos. organs and motion picture nlms.
As revised this section would yield
about sis2,50o. 900. From special taxes
would come slos. 900, 900. The continue
tion OF stamp taxes on documents. &C..
as at present, would yield s72.B0o.o0o.
This makes a total OF s3,12s.e5o. 900.
with the $3.50. 1000. 900 from the tariff
the total is pushed up to s3,57s.s5o.ooo.
thus giving some leeway for reduced
yieIds due to a continued slump In busi-
ness II the revenue bill Is based on the
$500. 900. 900 mark.