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Show PUTTING TAXES ! ON PEACE BASIS! Large Reduction Expected in the Revised Revenue Rev-enue Bill. Plan to Drop Taxation to Four Billions in 1920. YTASIIIAGTOX. "Dec. 9. Effects of ho nation's transition from a war to a peace basis and of prohibition legislation legis-lation on the present ami future problems prob-lems of taxation are outlined in the senate finance committee. 's report on the revised war revenue bill filed today to-day by Chairman Simmons. The report re-port explains the steps taken to revise the house, bill so as to raise by taxation next year $3,97S,4f5S,n00 instead of $7,-500,000,000, $7,-500,000,000, as planned by tho house before be-fore the signing of the armistice and the enactment of prohibition legislation. legisla-tion. Proposed taxes in 1020, of $,-000,000,000, $,-000,000,000, the reason for fixing them at this tifuo and tho manner in which they will be raised also arc explained. Corporation Tax. The most distinct changes made by tho senate in the house draft of the bill arc noted by the committee's report, re-port, as follows: Elimination of the 6 per cent corporation corpo-ration tax on undistributed corporate earnings, fixing a 20 per cent, maximum on bona fide sales of mines, and oil and gas wells; elimina.tion of tho tax on new state and municipal bonds, substitution substi-tution of a single war excess profits tax for the alternative plan; exclusion of individuals and partnerships from war excess taxation and reduction of the taxes on beverages and tobacco. Senate debate on the measure will bo-gin bo-gin tomorrow with a statement by Senator Sen-ator Simmons. A dissenting report on the plan to fix i!120 taxes in the pending pend-ing bill will be filed by Senator Penrose Pen-rose of Pennsylvania, for the Republicans Republi-cans of the finance committee. Separate Sepa-rate views also will be presented by Senators Smoot of L'tah and La Follctto of Wisconsin, li-opublicans. People Should Know. A considerable part of Senator Simmons Sim-mons 's report is devoted to the plan for reducing taxes 'in 1020 to $1,000,-000.000. $1,000,-000.000. 'The country has 'a right to know how soon and in what degree the burden bur-den of war taxes can prudently be reduced,''' re-duced,''' the report says. "During this period of reconstruction, business, particularly new business, is eutitled to go forward without the burden of hu SO per cent, tax on war profits. In time of peace the existence of an 80 per cent profits tax would bo an absolute abso-lute evil, for the perpetration or continuance con-tinuance of which no sufficient reason has or could be given. , For 1020 the report estimates a reduction re-duction of $1,400,000,000 by eliminating The SO per cent war profits tax, reduction reduc-tion of tho excess profits rates and reduction re-duction from 12 to S per cent in the normal rate on individual incomes and other corporation taxes. A further rc-Iduction rc-Iduction of about $.")00,000,000, it was estimated, es-timated, will occur from miscellaneous sources and shrinkage in beveiage revenues. rev-enues. e ''The main outline of the program (Continued on Page Nine.) PUTTIED TAXES DI PEACE BASIS j (Continued from Page One.) 1 proposed by the committee thus be-i be-i comes clear," the report states. "For the fiscal yea- 1939, it is planned to ; raise nearly $4,600,000,000 from income and profits taxes ami something over I $1,400,000,000 from other sources; for , tho fiscal year 1920 it is planned to raise somewhat less than $3,000,000,000 from income profits taxes, and about $1,000,000,000 from other sources. "About the general wisdom of such a program we entertain no serious doubt. It is imperative that profits and income for the year 1918 be heavily taxed. This is not only necessary, but it is equitable and in accordance with sound public policy. The profits realized re-alized during the year 19.18 arc in large part war profits; they are now in the pocket of the taxpayer; they should contribute heavily before they have been dissipated or reinvested toward the payment of the expenses of the -war to which in large measure thev are attributable. at-tributable. "But it is equallv important that these special taxes should be reduced as the occasion which inspired and justifies jus-tifies them recedes into t he past. ' To fail adequately to tax tho war profits of 1918 would constitute a manifost miscarriage of fiscal justice. Sot to provide now for the reduction of the war profits tax would be equally inexcusable. in-excusable. ' ' In addition to the tax reductions due to the fact that the government bow copes with peace instead of with war conditions, prohibition is expected to reduce revenue returns greatly. Beverage taxes under the house bill were estimated to raise $1,137,000,000 during th ir first twelve months of operation op-eration and $So0,000,U00 for the 1919 fiscal year. "At the present time, under changed conditions," says the repart, "it is possible pos-sible to count onlv upon $500,000,000 for 191S-1919 and $93,000,000 for 1919-1920 1919-1920 from this source.' Analyzing in detail the committee's radical changes, Senator Simmons 's report re-port explained that the revised individual indi-vidual surtax rates graduated upward 1 per cent on each $1000 over $o000, are more equitable than the arbitrary graduations grad-uations of the houso bill. Tho bill retains the house provision for income taxation of salaries, including includ-ing those Dossibly of the president and federal judges, locality of which the report re-port stated, is left to tho courts if the finest ion is raised. The report, however, how-ever, says that the house clause for fed- j eral taxation of new state and muniei- ! pal' bonds was stricken out as " it j seemed unwise for congress to attempt I to impose this tax upon the obligations of states and municipalities as long as the states are not froe to tax in a similar sim-ilar manner obligations of the United Slates. ' ' The plan of requiring affiliated corporations cor-porations to make consolidated income ! ! tax returns, the report states, will do j much to prevent tax evasion and tlir ' ' new- tax on life insurance companies ' ' ' true income ' ' from investments, in ! lieu of war excess. i n conic, capital ! stock and other taxes, is more equitable equit-able Tlic war c.y-cFs profits sc";irm, t!i r- ' rort states, hps been siTip!f and re- ihieod. The hnn.-p alternative plan of levying war ami pm-oss profits at which- I ever rate wouM yifkl the most revenue ; the ronTnittc f"Tn.l nhjp-tio;iab'e hecTu.o it." constitutionality is qnestione-i and jts o dministra ti n troublesome to tax pavers;. |