Evening star., 1921-01-14
BOARD OF TRADE RECOMMENDS
!. EXCESS PROFITS TAX REPEAL
As Substitute, to Meet Government Budget,
Suggests Excise Assessment and
Retail Sales Levy.

vate thrift and economy are as neceS.
sary as public thrift and economy if
| surplus capital for the extension ana
growth of business is to be supplied; !;
| third. all plans of taxation that induce
either public or private extravaganza
should be avoided.
| The report concurred in the first
proposition contained in the United
States Chamber of Commerce referen-
dunn. namely. that the excess profits
tax be repealed. but disapproved the
second proposal-that the revenue now
derived from this source be obtained
mainly from taxes on incomes.
I'VE cannot support that contention"
il stated. because we believe that di-
rect taxes. which are now conpara-
lively heavy. should be avoided as far
as possible"
To referendum proposal No. > for an
excise tax upon articles of wide use
but not of the first necessity. the COM
mittee's answer was favorable. The
committee also declared in favor of
sales tax in addition to an excise tax
upon the theory that the combined
amount of the two taxes will raise the
amount displaced by the repeal of the
excess profits tax. Its recommended
ton. however. was restricted to a tax
on retail sales as opposed to gen.
eral or even a limited turnover tax.
See Burden on Consumer.
Accumulated turnover taxes" said
the report. would bear heavily upon
the consumer. tend to perpetuate the
high cost of the necessities of life and
bear with undue weight upon persons
Of small incomes"
A sales tax of only l per cent upon
the final retail sales of merchandise,
the committee estimated. would pro-
duce in the neighborhood of four hun
dred million dollars year.
Concerning the referendum proposal
that there should be a moderate and
graduated tax on corporations net in
comes that are not distributed as divi-
dendS in lieu of the present corpora
tion income tax the committee
brought in an adverse recommended
ton.
The committee also suggested that
the board cast a negative vote on the
proposal that each individual stock
holder of a corporation should pay his
own normal tax. and that it disap-
prove the proposition that net losses
and inventory losses in any taxable
year should cause redetermination Of
taxes on income of the preceding year.
Additional proposals in the referendum
IN which the committee concurred are:
% that income from any new issues of
securities which may lawfully be made
subject to federal tax should be taxable:
t2) that American citizens resident
abroad should be exempt from the
iNdt tdA upOIi licOIHe ueFlNeu
abroad and not remitted to the United
States: CD that profits arising from the
sale Of capital assets should be allocated
over the period in which earned and
taxed at the rates for the several years
in the period: 90 that an exchange of
property Of like nature should be
considered merely as a replacement in
the course of which no gain or loss oc-
ours.
One Recommendation Disapproved.
All of the committees recommenda-
tons were adopted by the board with
the exception Of the one that American
citizens resident abroad should be ex-
empt from the American tax upon in
come derived abroad and not remitted to
the United States.
Edward H Droop spoke against adop-
ton Of the recommendation for an ex-
else tax on articles of wide use, SAYING
1t had been proposed to place a 10 per
cent tax on musical instruments. He
classed music as necessity of the first
importance and declared that tax on
this industry would be keenly felt by
all citizens. The board. however. sus-
ta1ned the recommendation of the com
mittee.