Excess Profits Taxation. II. A Business Man's View

Abstract

In this paper I am going to tr y to present the business man's point of view towards the Excess Profits Tax Act and to discuss some of the problems which confront him as a result of it. By way of introduction I should like to make it quite clear that I do not write here as an apologist of tax evasion or as a critic of the pay-as-you-go policy or as an opponent of taxing those best able to pay. Rather I shall try to explain some of the problems and some of the objections without necessarily expressing an opinion in every case as to whether or not the objections are justifiable.One of the issues which apparently will be decided by this war is the survival, or otherwise, of capitalism even in modified form; but in this country for the time being a decision on that point has not yet been reached, and the profit motive and individual incentive are still the driving forces of our businesses and industries which the government is depending upon in a large measure to provide the instruments of war and the money with which to pay for them. The government is not yet prepared to underwrite business risks. It shares in the profits without sharing in the losses, and does not even allow the losses of one year to be offset by the profits of another, for tax purposes. In times of high taxes, the result, in many cases, is to convert taxes on income and profits into a confiscation of capital. These circumstances must be kept in mind as the background of what I have to say.