The New York herald., 1921-09-25
INCOME and PROFITS
TAXES FOR This YEAR
ARE A BILLION LESS
Shrinkage Reckoned Upon
by Senate in Revising Bill
for $3,324,OOO,OOO.
ECONOMY THE REMEDY
Expenditures for 1922 Are
Estimated by Lawmakers
at $4,O34, 100000.
50, 735, 100000 IN REVENUE
SurtaX of 80 Per Cent. EX-
pected to Yield More Than
65 Per Cent.
ECONOMY THE REMEDY
So, 100000 IN REVENUE

WASHINGTON, sept. ga Shrlnkage
of more than $1,000. 600. 900 in income
and excess profits taxes this fiscal year
was reckoned upon by the Senate FL
nance Committee in revising the
House tax bill with a view to raising
$3,324. 900 900 in Internal Revenue in
the twelve months, ending next June
80.
This was disclosed by the majority
report approved to-day by committee
Republicans. The estimated total of
revenue under the bill is $136,000,000
less than Treasury experts have fig
ured would be returned this fiscal
year under the present law, but Is
$s4.O00.O 900 more than the revised to
tai under the House bill.
Estimated returns this fiscal year
from income and profits taxes are
$3.50 0.o00.0 900, according to the report,
as against approximately s3,000.ooo,
900 of actual collections in the fiscal
year ended last June 80. Only about
$50, ,000, 900 of this difference Of $1.120,-
100000 Is accounted for by changes
proposed in the present law.
Treasury officers and committee mem
bers explained that the remainder Is
charged off to shrinkage on account of
business depression, diversion of funds
to tax exempt securities and other diver
sions
"a f~f NTu wUfr NJ
Declaring that the s3.324. 100000 total
proposed under the revised bill was only
s52,0O0,000 more than the Treasury had
estimated would have to be raised
through internal taxes. the report said
this was "a margin Of safety none too
large for the fiscal year. 1922, in view
or the, existing business depression and
the uncertainty attaching to the yield OF
the income and profits taxes.
Your committee has acted" the re-
port said. ION the assumption that with
the exception of the special railroad
expenditures, which will be nearly IL
not wholly completed in the fiscal year
1922, the aggregate expenditures for the
fiscal year 1923 will be substantially as
large as in the fiscal year 1922. The
special railroad expenditures included in
the 1922 budget amount in round figures
to 500. 900 and the receipts from GUS
toms and miscellaneous sources for the
fiscal year 1873 are estimated at $780,
900, 900. Deducting both amounts ($1. .230, :
00.O0O) from the total estimated expen-
ditures for 1922 (S4,G34 .o0O. .OoD leaves in
round figures 81, 800. .0O0,0 900 to be supplied
by internal taxes for the fiscal year
1923.
'The revenue bill as recommended by
your committee will raise during 1928
1t is estimated. s2,7s5. 700, 900. The diff
ference or deficit Of $4,000. .000-abous
equal to the corresponding surplus for
the fiscal year 1922-can and should
be avoided by savings and economies.
Your committee deliberately recon-
mends tax programme which. while
providing revenues substantially suffi-
cient to meet ordinary expenditures on
the present scale, assumes that a rea-
sonable measure Of retrenchment and
reductions will be accomplished
Important Changes I'm Bill.
From the standpoint OF revenue =
the report added. "the most important
changes recommended are:
Repeal of the excess profits tax,
which would reduce the revenue about
500. 900 annually.
Repeal of the surtaxes in excess OF
% per cent. involving an immediate loss
of from $4,000 600 to $50 COZ. 900 a year.
Repeal OF the capital stock tax. in
volving an annual loss of about s75.-
O0o. 900.
Reduction OF the transportation taxes
by one-half on January /. 1922. and their
final repeal as of December 81, 1923, in
volving a reduction of s13l. .0O0. 900 in the
calendar year 1922 and an eventual loss
of 262.0o0o00 a year
Adoption of an additional income tax
upon corporations OF per cent, which
would increase the revenue about $780,
100000 annually.
The excess profits tax has been so
thoroughly discussed that It Is unneces-
sary to state at length the reasons which
have led your committee to recommend
its repeal The time for discussion Is
past and the time to repeal the tax has
arrived"
Regarding surfaces the report said /:
"Your committee recommends reduc-
ton OF the maximum surtax from SIS per
cent. to 90 per cent, in the belief that
In the near future the lower surtax will
by stimulation OF sales and profit taking
and by making possible transactions
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