An Appraisal of the Excess Profits Tax from a Fiscal Standpoint

Abstract

Certain institutions though irreproachable as to ends are discredited by clumsy means; they are right and valid by definition but the definition will not stand the test of application. The excess profits tax belongs to this order. We are committed for the war period to a program of high business taxation with much stress on the excess profits tax. It may be in order, nevertheless, to appraise the excess profits tax in the light of new experience. The degree of the tax, at least, is a matter for further consideration, and the question of what disposition to make of this emergency levy when peace is resumed is timely. To treat the latter issue satisfactorily it is necessary to raise anew the question of the proper place of business taxation and to weigh the excess profits tax against alternative sources of revenue.