The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1950-08-10
Senators Cool To
'Mahoney Plea To
Tax Excess Profits

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Joseph C. O'Mahoney Cd, Wyo.)
repeated to the members of the
Senate tax-writing committee his
plea for stiff tax on 1860 excess
profits, he met with cool reception.
In fact, the Senate Finance COM
mittee proceeded the same day to
cut out about $176, ,0CO,O worth of
revenue producing provisions con-
tanned in the House version of the
1850 tax bill.
They have not yet reached the
emergency proposals by President
Truman to raise corporation and
personal income taxes to increase
the federal treasury's take by SIS
billions a year. Earlier, the COM
mittee had decided to abandon new
depletion allowance handouts vot-
ed by the House to sand, gravel,
and other producers. This will save
$40, 100000 that otherwise would
have been lost.
Both AFL and CIO have urged
the Senator'S to write a 1850 ex-
cess profits levy into the current
legislation. Administration spokes-
men still think it should be done
later, after the elections, to start
with 1861 income.
O'Mahoney told the committee
that corporate profits are running
at an all-time high and are rapidly
Increasing"
s Passage of military spending
bills requested by President Tru-
man will "open the flood gates of
inflation," he declared, "unless we
take immediate steps to control
this deluge of dollars by new taxes
which will prevent private pur-
chasing power from competing with
newly created government purchas-
ing power for the purchase of a
short supply of goods and SER
vices"
Prices were running at new
highs even before the Korean
crisis, O'Mahoney pointed out. The
effect of government expenditure
hasn't been felt yet.
Fortunately the profit picture
as it now presents itself is suffic-
lent to guarantee the success of a
pay-as-you-go system" he said.
corporate profits have reached
levels never dreamed possible be-
fore the war. In 1910, before we
actually became involved, they
amounted to 1913 billion. They
jumped to new high of $25.1 bill
ions in 1943 and receded slightly
to $24.3 billions in 1914. But corp
crate profits after taxes in each
war year, except 1945 were larger
than corporate profits before taxes
ins 1940.l They ranged from 1914
billions in l941 to S10.8 billions in
1914 after the tax bill in World
War III had been paid.
"Obviously, corporate profit s
throughout World War III could
have made much larger contribu
ton to the current cost of the war
than they were called upon to do.
Ever since the speedy reconver-
sion of 1945-46, corporate profits
in the new fully-employed economy
have been running at far higher
levels than during the war. For
1947, profits before taxes amount
ed to 30.5 billions; they rose to|
$500 billions in 1948; fell off to
$27.6 billions in l949; jumped again
in the first quarter of 1860 to|
$29.2 billions. The universal testi-
mony from the most conservative
centers of finance in New York
tells us that in the second quarterl
of this year they are going higherl
STILL"
Citing figures from the Nationall
City Bank, the Wall Street Journal
and the Associated Press, showingl
profit increases from 43 to 500 i
O'Mahoney said he could draw onlyI
one conclusion from these figures:
While we are drafting young men
for the purposes of the war wei
must not fail to draft these extra
ordinary dollar profits of the CORP
crate economy.
"Lets take these profits now. Tol
take them next year will be too
late, because every dollar of these
billions of profits which do not go
to war now will be adding to the
nflationary pressures and thereby
hinder the war effort"
His proposals, he said, would not
fall heavily upon small business,
because they provide an exemption
Of $4,000. II applies only to pro-
fits in the very high brackets. 1t is
based on the top 25% Of profits
rom 1947 through l949.
Labor has said it will not accept
wage controls unless there is an
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