Show Business Today f War Profits Remain Tax Problem V By fly JAMES MARLOW ARLo and f GEORGE ZIELIE WASHINGTON Oct 5 Wide World Combined World Combined opposition of the treasury army navy and maritime maritime mari mart time commission has stalled the campaign against the government governments government's governments government's govern govern- ments ment's authority to renegotiate war contracts The senate finance committee ent set the te revised text of the new tax tx bill bl to t the te printers printer without any move to wite write a a war profits the alternative limitation the te proposed alera- alera tive to renegotiation renegotiation Into into it The e wide variety of suggestions was a f factor ctr as Chairman George Georg Gorge to of ot the committee wants want speedy speed t enactment of the te revenue bill bi am and reconciling of all al the conflicting ideas idel would woud appear to be a a. a long process Could Agree However Senator Walsh Wash D. D Mass as chairman of ot a subcommittee tee studying renegotiation said sale that if l the interested government departments could get together and agree on some changes In the war var contract negotiation law they tey offered amendments could be as to the tax bill bi on the te senate floor The whole question is tied up closely cosely with the estimated yield of the tax me measure sue for as a Senator George pointed out the army ary navy And nd maritime commission by renegotiating renegotiating re re- re- re negotiating contracts may trim armament makers' makers profits to the te extent that the revenue from rom the I excess profits profs levy would drop sharply Hence while there is I a general agreement on the proposition of taking the profit out of war Its It's a a complicating factor in tryIng try- try trying Ing ig to estimate the governments government's income income and and expenditures The treasury's viewpoint was stated before the subcommittee by Robert Lee Eicholz Eichholz assistant tax counsel for the te treasury Costs Cited CIte If I you adopt a flat fat profit prom limitation limitation limi limi- tation you have done nothing noting about controlling costs As a matter of fact fact you might make the situation situa situa- tion ton worse A profits profs limitation only cuts down the te 5 or 10 or 15 per cent that tat goes to profits profs It I leaves the other 85 or 90 per cent to ride free He added that the renegotiation law provided about the best mechanism we can think tink of ot to control prices of armaments and keep the te cost of war Implements implement down dow I In this connection theres there's a a I widely held theory theor that limiting a e manufacturer to a a certain profit sy say 5 or 6 per cent cent kills kis his initiative initiative initia initia- tive to do more work work and and more economical work Senator George had suggested amendments amendment which would Consider profits excessive only If l they tey were at least 5 per cent of volume V Suits Limit renegotiation to one year after the end of the taxable ed table year In i which the work was performed Provide for renegotiation on an over all overal basis Including profits from all al government contracts for a. a given year Determine excessive profits proms only after subtracting all al federal In Income Income income in- in come come and excess profits taxes Exclude certain kinds of ot contracts con con- contracts tracts from renegotiation renegotiation including trig ing ig those tose for raw material personal personal per per- services and standard commercial commercial com corn mercial fabricated articles articles and and exclude those companies whose toW total to to- tat tal volume of government contracts contracts con conS tracts did not exceed a year The subcommittee heard testimony testimony test test- mony that tat the present law was delaying the war effort effort because because business men have been pulled away from their work for renegotiation renegotiation discussions discussions and and and that tat if l the law stays on the books thousands of negotiators will wi be needed and that businesses will wi have to hire additional thousands of account account- ants ant |