Evening star., 1940-09-06

those defined as normal"
By the Associated Press.
The Senate Finance Committee
uaded into the job OF overhauling
the complex excess profits tax bill
today in an effort to meet conflict
ing views of its members on what
the measure should contain when it
goes to the Senate floor early next
week.
Chairman Harrison called the
committee together in a closed ses-
sion and announced that 1--WE will
try to formulate a bill, not to try
to please everybody, but in the hope
OF trying to please somebody
The committee wearily wound up
public hearings on the measure last
night after hearing about so spokes-
men for business and industry at
tack the House-approved legislation
as discriminatory"
Called Tax on Normal Profits.
The witnesses contended that it
was more of tax on normal profits
than a levy on abnormal revenues
derived from defense spending.
Many forecast that unless the bill
was drastically revised, it would i'm
pede the defense program.
Among these critics were the
United States Chamber of Com
merce and the National Association
OF Manufacturers.
A somewhat different attitude was
presented by the American Farm
Bureau Federation. While urging
changes, w. r. Ogg proposed, on
behalf of the bureau, that the pro-
visions designed to capture large
profits be made even more stringent
by imposing a reasonable ceiling"
on what might be defined as nor
NAL" return under the formula in
the BILL
THE American people" he said,
"are in no mood to tolerate, in this
time of grave emergency, any group
demanding inordinate profits or spe-
cial privileges as the price of pro-
ducing the supplies and materials
that are vitally necessary to our
national security"
Committee members expressed
general agreement on two points
that some administrative authority
should be granted to relieve hard
ship" cases and that, whatever was
done, the bill should be made
simpler.
Three Glasses of Criticism.
Much of the criticism by witnesses
at yesterdays extensive hearings
fell into these main categories:
/. That the bill would place a
heavy new tax burden on young and
growing corporations while we'll
established firms with stable earn
ings and large amount of invested
capital might escape lightly, regard
less of whether Eearnings in either
case came from the defense pro-
gram.
2. That the four-year base period
for computing normal" profits
would impose inequitable tax loads
on business competitors In special
cases involving unusual losses in the
last few years, seasonal or intermit-
tent character of particular in
dustry, heavy load of debt or other
reasons.
3. That the bill was so compli-
Gated no businessmen could tell in
advance what their tax liability
might be.
Amendments Considered.
Some of the amendments which
committee members said they would
offer during the executive session
would:
l. Base the sliding scale of ex-
cess profits taxes on a percentage
of income over normal instead of
on the dollar amount OF excess
earnings.
2. Establish a fiat percentage rate
OF return on invested capital as
normal without reference to any
base period.
g. Increase the present 209 per
cent income tax on all corporations
by or 4 per cent to make up for
revenue lost by other revisions.
4. Eliminate strings" attached to
liberalized amortization require
ments for firms working on defense
orders. This has been urged by the
Defense Advisory Commission as
we'll as the War and Navy Depart
ments.
5. Impose a "differential" tax on
profits of industries profiting di-
rectly from the defense contracts,