Higher than the British

Business taxes far higher than the British were voted by the House this week and sent along to the Senate.

On sales taxes (which run from 16% to 67% in England on all but the barest necessities) and lower-bracket income taxes (which hit 50% in England at the $660-a-year income level) the U.S. citizen has not even begun to fight. But the U.S. corporation, long the biggest taxpayer on earth, will have extra good tax reason next year to feel that war is hell.

Specifically:

>> The House upped the rate on so-called normal profits from last year's 31% to a new high of 40%. In England business pays only 5% on its normal profits, and even that 5% can be deducted from any excess-profits levy the corporation may have to pay. (The British also withhold at the source the minimum 50% personal income tax, but this is not a tax on business. Stockholders can deduct the full amount from their individual income-tax payments, can even claim a refund if they are tax-exempt.)

>> The House upped the rate on so-called excess profits from last year's effective maximum of 72.4% to a new high of 90%. This rate looks lower than the 100% excess-profits tax in England, but actually there are four reasons why the U.S. tax is stiffer:

1) One-fifth of the British excess-profits tax gets refunded after the war, making the real British excess-profits tax 80%. The British adopted the 20% refund provisions last year when they found that their 100% levy was slowing down their war effort by depriving business of any profit incentive to produce.

2) The U.S. begins assessing excess profits 5% below the pre-war profit level, so that, for example, a U.S. company whose pre-war earnings were $100,000 would have an excess-profits credit of $95,000 and would, therefore, have to earn $145,000 before its net, after excess-profits taxes, would get back up to $100,000.

3) The British let their corporations average their excess profits over the whole war period, promise a refund if the company earns less than its excess-profits tax base in some later war year.

4) The British try to make sure that only true war profits are subjected to the excess-profits tax. They permit corporations to base their excess-profits-tax exemption on the corporation's best pre-war year if it was 1935 or 1936, or on the most prosperous combination of 1935 and 1937 or 1936 and 1937. U.S. corporations have to take the bad years with the good.

The only U.S. corporations which get a better break are those with heavy capital investments, like utilities and railroads.

U.S. employment hit a new peak of 53,300,000 in June--up 1,700,000 over May. But even so WPA reckons that unemployment went up 200,000 last month to a total of 2,800,000, because 1,900,000 young people finished school and began looking for jobs.

This file is automatically generated by a robot program, so reader's discretion is required.