Detroit evening times. (Detroit, Mich) 1921-1958, 1941-05-27
Even Author
Confused on
Profits Tax
E1plains TO LeeisIo tors,
Uses Wrong Figures
BY PAUL MALLON

ne new Sledge-ndmmeflnG
excess profits tax plan is diff
ilCult 10 dcrStan d. The
author, Treasury Assistant Sec
rotary John l.. Sullivan. there
fore produced a blackboard and
chalkcd out some examples Of
how il would work for the en-
lightcnment of the House
WAYS and means committee.
Next daY Sullivan discovered.
much TO his amazement. that
the way he had worked the
examples of some hypothetical
corporations out for the con-
GresSmen, the orpOr-a ions
would pay less under the new
plan than they are paying now.
That could not be right.
Techpical assistants Cthe only
ones who really know were
summoned, They showed Sulli-
van he had made several mis-
takes in working out the exam
pies.
Sullivan devised the policy,
left technicalities 10 his eX-
perts. His boss. Mr.. Morgen-
thau probably understands the
details far less. and Mr.. Roose-
welt probably not at all.
PERSONALLY / am unable
to enjoy this laugh on Sui
Ivan as some readers of this
column are free to enjoy the
same one on me.
In a recent column I figured
the tax would hit the largest
corporations hardest, but read
crs have correctly contradicted
this assertion Such COM
panics as Du Pont and Sears
Roebuck. with huge capitaliza-
tionS, are afforded a compare
lively low earnings ratio. and
thus escape the severity of the
proposed capitalization yard
stick.
A further indication that
small and medium business
would bear the brunt of the
scheme will be found in Twen-
tieth Century Fund publication,
How Profitable Is Big Bust
neSs?' A survey printed therein
shows that 27.S per cent of
American corporations are capi-
-talized -iess-thanES50, 900.
while only 81 per cent have a
capitalization Of more than $50
= 100000.
The only thing sure in all
these tax discussions so far is
that the complexities demand
long and careful consideration
and this the House ways and
means committee proposed 10
furnish. The bill will not be out
of committee for six weeks, and
then probably not in the form
the treasury recommended.
A DIRECT check made by
n government official last
week showed no Germans in
Dakar. or even in Morocco, with
the exception of an armiStice
mission in the latter area. The
Nazis are waiting to clean up
the eastern Mediterranean be-
fore they reach for the western
end of what apparently is TO
become Mare Nazi. for a while,
al least.
The French are quite strongly
entrenched in Dakar. If the Brit
iSh or the United States attempt
To take II. the French would
certainly call for German rein
forcementS. and get some Stukas
through TuniSia Ohe way Oar
Ian let them he sent into
Libya). Our military men do not
believe occupation by US would
he feasible, without months of
preparation.
These facts should be whis-
pered quietly into the ear of
Senator Pepper, some admins
tratlon men say. so he will stop
hollering for Mr.. Roosevelt TO
seize Dakar Unless such talk
IS stopped, the Germans may
believe they should get in first.
and thereupon seize the stratc-
sic spot forthwith
Apparently many propagan-
dlStS, assuming the role of anna
tcur military StrategistS. are
guessing in their talks, at what
they suspect Mr. Roosevelt
would like They are trying To
anticipate and please him. not
always combining themselves TO
what they have been told to say.
Around tho war and navy de-
partmcnt and oven the state
department considerable resent
mcnt can bc heard.
YOU viii not be able 10 meas
L mc the strategic value of
Crete TO the Nazis by Judging its
airline distance 10 the Suez and
the British nav al base in Alex
andrla. The Germans al Tobruk
are closer 10 both spots now.
But in Crete they will have a
protected line of supplies for
moro planes. gas and oil back
through Greece 10 Berlin.
More than 100 Nazi planes of
all types are already in the
MoSul area. charging the air
fields for bomber takco1S. II
the air fields in Crete are sim.
llarly prepared by the NaziS
that end of the Mediterranean