Word: excessive
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Dates: during 1940-1949
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...written off the owner's books, in the tax returns, at 20% a year (far higher than normal depreciation rates in most manufacturing industries). By reducing their taxable profits on war goods, this depreciation rate will keep many manufacturers out of the higher brackets of an excess-profits...
Last week Franklin Roosevelt, in 85 not very specific words, asked Congress for "a steeply graduated excess-profits tax." Congress was surprised. Week before, a hasty rewrite of the World War excess-profits tax, passed by the Senate, had been killed in conference committee under Administration pressure (TIME, July 1). The conferees had asked the Treasury for its idea of a good excess-profits bill by Oct. 1, and few Congressmen expected to have to face the problem until then. Suddenly, the same day that their tax leaders (Senator Harrison, Representatives Doughton and Cooper) were invited to the Treasury...
...Congress' real job was to overhaul the entire U. S. tax structure, revise it toward two simple objectives: maximum revenues and maximum production. Meanwhile, with the President's untimely words in its ears, many a U. S. corporation recalled the last time it had "a steeply graduated excess-profits tax." The memory was not pleasant...
McAdoo's Mistake. From the U. S. Treasury's standpoint, the excess-profits tax of 1918 was a howling success. Together with the less lucrative war-profits tax, it raised $2,505,566,000 in its first year, was the Treasury's all-time-record money raiser. But it was one of the most unpopular taxes levied in the U. S. since the Boston Tea Party. Years later William Gibbs McAdoo, whose job was to collect it, wrote: "The unpopularity of the bill . . . was undoubtedly the most potent factor in the defeat of the Democrats...
...Profits Too? Not to be confused with an excess-profits tax is a war-profits tax, also used in 1918. Its principle: to measure each corporation's "standard" profits (average of several pre-war years) and tax everything it earns above that. This was especially hard on corporations with a poor pre-war earnings history. Looking back on the deficits of Depressions I and II, many a U. S. businessman took no comfort last week in the thought that this tax, too, might be revived. The U. S. Chamber of Commerce thumbed down both taxes, suggested that ordinary income...