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Show THE excess profits tax, which the senate and house have extended ex-tended for a six month period after strong administration pressure, is one of the most controversial and little known of our federal levies. Even the Eisenhower administration, administra-tion, while insisting upon it, called it a "necessary evil". Here are its basic facts: l Who pays it Less than 12 per cent of the nation's 424,000 corporations corpo-rations with taxable Income. How much money will be raised by the six-months extension About $800 million will be added to the government's till in fiscal 1954. How do corporations compute the tax They figure earnings during dur-ing 1946 through 1949 and report average earnings during the three most profitable years of that stretch. Eighty-three per cent of that average is "normal profit" congress decided. Earnings over that amount are liable to the excess ex-cess profits tax of 30 per cent. This is on top of regular corporate Income In-come taxes. What is the purpose of the EPT It was designed to limit the profits of businesses involved in defense work. What percentage of corporation tax receipts comes from the EPT The Ways and Means Committee estimated $2 billion out of a total take of $23 billion in corporate taxes come from the excess profits levy. That's about 8.7 per cent. Why was extension urged for what Treasury Secretary George M. Humphrey called a "bad tax" It will help shrink the deficit of $9.4 billion, a record for the government gov-ernment to be in the red. Also the administration has said it didn't want taxes on business cut before taxes on individual income, which are to become lower Jan. 1, 1954. Why is it a bad tax President Eisenhower said the EPT Is "especially "es-pecially hard on successful small businesses which must depend on retained earnings for growth." Assistant As-sistant Secretary of Commerce Craig R. Sheaffer . said the tax "purposely hits hardest on new and growing enterprises" and encourages en-courages "wasteful management." The Post Office Department Is again asking congress to grant an increase in postal rates in an effort to get the long-time money losing service out of the red. If the move is successful here's what will happen to mail users: 1. A deep pink four cent stamp will be required for out-of-town letters. let-ters. (The familiar purple three-center three-center still will be good for in-town first class mail.) 2. Airmail rates will go up from six to seven cents per ounce. 3. Book rates will increase from eight to ten cents for the first pound and lour to five cents for each extra pound. 4. Varied boosts will prevail for different types of second and third class mail. i The mail rate increase may eventually become law, but at the moment congressmen, although talking a lot about "economy" and-"balancing and-"balancing the budget," show no signs of haste in putting It into effect |