Show EXPERTS READY TAX BILL DRAFT WASHINGTON Sept 30 UP uP- uP Congressional legal experts worked Monday on the final draft of the excess profits tax-plant tax amortization tion bill which will be presented to the house for final approval Tuesday The final draft was agreed to toby toby toby by a senate-house senate conference committee committee com corn at an unusual Sunday ses sea sion zion The conferees had been s seeking for seven days a compromise compromise compro compro- mise on the house and senate versions versions versions ver ver- for the bill which Is Intended to Lo speed the defense program Only two major pieces of defense legislation remain The home guard bill which would authorize I states to establish a new nev military organization to replace national guardsmen inducted into the regular regular regu regu- i lar army the house-approved house 1 navy army-navy deficiency appropriation bill carrying funds to finance conscription Promises Action ActionS S Senate e n a ate t e Finance Committee Chairman Pat Harrison promised senate action on conference reports reports reports re re- re- re ports of the tax bill as soon as I possible after the house approves approves approves ap ap- ap- ap proves it I In its present form the bill Is I expected to raise about annually after the first year of I its operation according to Harri Harri- son Estimates of revenue for the present fiscal year were not available available available avail avail- able because of minute last changes I The excess profits features will affect approximately cor car Normal Income taxes of corporations corporations corporations corpora corpora- with a net income of more than a year would be Increased in increased increased in- in creased 31 per cent thus bringing the total corporate tax rate in including including including in- in the permanent rate and Imd temporary national defense taxes on ott such corporations to 24 per cent Provisions Pro of Bill The other provisions of the bill bilI Corp Corporations required to pay a graduated excess profits tax on allnet all allnet allnet net income in excess of a theoretical cal normal Income Corporations can compute theoretical normal Income by two methods Use average earnings in the years 39 1936 Inclusive as base 95 35 per cent of that figure plus would be free from the excess excess ex ex- ex cess profits tax schedules Consider a corporations corporation's profits normal up to a return of 8 per percent percent percent cent on invested capital plus an additional exemption The excess profits tax rates which would fall tall upon earnings in excess of the normal would be Excess profits Pet of Tax Tax- Less than i. i 25 to 30 to 1 35 to 40 40 to 45 45 and over 50 Commissioner of internal revenue is authorized to adjust abnormalities abnormalities abnormalities abnor in income such as earnings earnings earnings earn earn- ings suddenly accrued after several years of litigation exploration or development Firms with a net Income of less than are permitted to carry carryover carryover carryover over for one year any portion of their excess profits tax credit which was not actually earned Thus if a corporation with a credit of should make only it would be allowed to make 24 during the following year before before before be be- fore the tax schedules become ef ef- ef Plant amortization would permit corporations to write off plant expansion expansion ex ex- costs certified as necessary necessary necessary sary to national defense through tax credits over a year five-year period Repeal of the Vinson-Trammel Vinson act would repeal the act which set seta a limitation of 8 per cent upon profits of or military airplane and naval contracts |