Evening star., 1921-08-16
TAX REVISION BILL
lessons REVENUE
$79,33p,oDO YEARLY
Majority Report on Measure
Is Given to House Today
by Chairman Fordney.
$406, ESQ, 900 OF LOSS
NOT FELT TILL 1923
Repeal of Excess Profits Tax and
Reduced Surtax Rates
Deferred.

Deferred.
The annual tax bill of the Ameri-
can people will be lessened by $780,
100000 through the operation OF the
new tax revision bill. reported to .the
House today, according to a report
filed by Chairman Fordney Of the
ways and means committee on behalf
of the majority members of the COM
mittee.
Mr.. Fordney explains, however.
that due to the fact that the pro-
visions of the new bill will not be-
come fully effective until the calen-
dar year. 1922. not all of the reduce
tions in revenue are to be expected
prior to the collections in 1929. He
said:
while a net loss in revenue of
$790,330.0o0 is expected. only por-
tion of this loss will be reflected in
revenue collections for the fiscal year
ending June 80. 1922.
Repeal Elective in 1922.
"lnasmuch as the repeal of the ex-
cess profits tax and reduction Of sur
tax rates on individual incomes do
not become effective until the calen-
dar year of 1922. s406.25O.0O0 of the
contemplated loss of revenue will not
he reflected in revenue collections
prior to the calendar year of 1928"
Actual reductions In taxes for this
fiscal year. the report continued. are
estimated at approximately 100000
600, total collections under the new
bill being figured at $3.376.00O,OOO as
against estimated collections of $3,-
57o,000.000 under the. present law.
Estimated Loss Is $377.70O.000.
The estimated loss of revenue for
the calendar year 1922 Is figured at
S377,79O.O0O.
Overnight changes made in the
bill provide for a corporation tax of
12,s per cent instead of is per cent
on life insurance companies. effective
this year. this levy to be in lieu of
ell other taxes. including those on
policies. except the corporation stock
and stamp leyies.
In the case of Individual taxpayers
deriving profits from the sale Of
capital assets, a Is per cent tax on
the gain from the disposition of such
assets would be imposed where the
net income and capital assets gain
fixed in the original committee draft.
The majority report says:
"In framing the tax legislation
herein recommended the commtttee
sssss FSsn ss sIisias u sasSsns.
with few minor exceptions. new tax
,lcvies (many OF which were suggest
ed have been avoided. In the opinion
OF your committee the exacting Of the
present excessive sums of taxes from
the country contributes in no small
degree to the depressing influences
under which business and industry
In general are staggering as an after
math Of the world war.
rSf fhA
Of it's destruction and the financial
loss it occasions is felt. not during
the period of combat. but after the
cessation Of hostilities. at which time
mates. with a resulting shrinkage of
values.
THE nation is now passing through
the trying period Of liquidation and
readjustment.. The reduction Of the
tax burdens Is essential to business
recovery. and such reduction can only
be based on a rigid enforcement of
a policy Of the strictest economy in
the running expenses Of the govern
ment.
Excess Profits Tax Criticized.
1.-THE excess profits tax, with an
exemption based on the amount Of
invested capital. has been the subject
equalities and the discrimination
against the corporation with small
invested capital are recognized gen.
orally. It's repeal has been repeated
ly recommended by Treasury officials.
"The committee recommends the
Limitation of 80 per cent on sur
taxes mainly because the higher
rates have proven to be beyond the
point Of productivity and have driven
Investments from the usual channels
of trade and industry. The excess
sively high rates in existing law
have resulted in various methods OF
tax evasion. the most outstanding one
being the transfer of investments to
tay-exempt securities.
1.-THE cost of transportation Is re-
flected in all lines Of commerce and In.
dustry, and much Of the excessive cost
of certain products can be attributed
to transportation costs. Especially Is
this true with regard to building ma
terial. The repeal of the transporta.
ton tax will relieve the shipper ana
to some extent increase railroad ton.
mage and the revenues OF the rail-.
roads. The repeal of this tax should
have salutary effects upon business
conditionsatn general: The removal OF
the tax on transportation tnciuding
freight. passenger and expressl re-
duces the revenue collections $751;
0o0. .00o, a SUM amounting to more than
80 ner capita per annum."
Further details of the tax revision
hill will be found on page 8.