Evening star., 1921-08-07
Ten Days May Be Required
to Put Measure in Shape
for House Action.
CHAIRMAN FORDNEY
80.
OUTLINES PROCEDURE
Increased Corporation Income Tax
Suggested as Substitute for
Excess Profits.

The rewriting of the levy pro-
visions of the federal tax law Of 1918
probably will be begun by the ma
jority members of the ways and
means committee tomorrow, Chair
man Fordney said last night. The
committeeman plan to get down TO
hard work on the measure and TO
have 1t completed within the next ten
days. unless unexpected snags arc
encountered.
When the bill has been. reported
to the House. it was generally con-
ceded. consideration of the measure
in the House itself will require onl..
few days.
Excess PrOBts Provisions.
With revision of the administrative
features out of the way. the work
now before the republican committee
men is to determine the extent of the
cuts possible and just where they
are to be made. The general belief
seems to be that the committee will
propose repeal Of the excess profits
tax. but whether the effective date
will be last January / or next Janu-
airy 1 apparently remains to be de-
termined
As a substitute for the excess
profits tax it is planned to increase
the corporation income tax from the
present 10 per cent to Is per cent
and also to repeal the $4,000 eX-
emption allowed corporations under
the existing law. Chairman Fordney
said. however. that it might be neces-
sary to make some specific provisions
in the bill to relieve the burden 1T
has been claimed this would impose
1 on the small corporations with Iim-
tied incomes.
The chairman also disclosed a pro-
posal to write into the new bill a
provision taxing the income OF the
so-called personal service corpora
tions. such as architectural firms not
Incorporated under law. the same as
the income Of other corporations
The Supreme Court has held that the
present law Is not applicable to such
concerns.
Mr.. Fordney also said 1t was not
proposed to relieve public service
corporations from q part Of the is
per cent income tax provision Of the
bill. The chairman indicated that
he was not particularly impressed
with the argument that this would
hit many such corporations very
hard. saying that electric light. street
railway, gas and such companies
having a small net income would pay
q proportionately small revenue to
the government.
Other Proposed Changes.
Aside from revision Of these levy
sections of the law. the minds of
many committee members are turn
ed to a repeal Of the higher income
surtaxes. of all or part of the trans
portation taxes and Of the fountain
and ice cream levies. 1t is explained.
| however. that it does not necessarily
| follow that these changes will be
| made or that other changes in the
| 1918 law will not be made. The
| actual revisions are yet to be agreed
| upon, with indications of some Aghts
| in the committee before the com
pteIcQ Oil COulSs oul.
1t was estimated yesterday by some
| that immediate repeal of the whole
TRANSPORTATION tax, the soda water
tax and the higher surtaxes. together
with the s55,O00.o00 which the Treas
ury experts figure will be lost this
fiscal year through repeal of the ex-
cess profits tax as Of last January !.
would approximate the half billion
dollar cut which republican leaders
in the House insist can be made in
the tax levy =
Receipts and Expenditnres.
With such q reduction. the taxes to
be paid this fiscal year would approx
innate $3,070.000.o0O. on the basis Of
Treasury estimates presented to the
committee, and would include $780,
ooo, 900 estimated back taxes. In adj
dition to this income, the Treasury
figures customs receipts under the
proposed new tariff law at $780,
00o, 900 and income from miscellane-
Gus sources at about $350.000.0oo.
! making a total income of $3,7S0.-
$1,000, as against an outgo esu-
mated in the Treasury statement at
| $4,554,0oo.00o. -,
Supporters Of the tax cut declare.
| however, that the apparent deffcit OF
| $7s4, 100000 would be greatly de-
creased through additional collections
on back taxes. estimated at probably
s1o0, ,O00. 900. q larger income from
miscellaneous sources. and decreases
in expenditures, including those ON
account of the public debt and the
va rious federal departments.