But America's present task is to bring industry to higher production in providing for our defense. Under our economic system there must be the incentive of profits.(9)
Let us hope the excesses and abuses may not exceed those of the last war and may not bring more disastrous results.(10) September 20, 1940
This bill, "whisked through the House in less than four hours" (AP, Aug. 30, 1940), repealed the provision of the Vinson Bill limiting armament profits, against which the armament manufacturers had been on strike. Originally the Vinson Bill had been regarded as generous. The Nation, Nov. 18, 1939, remarked, "The current war will certainly make the world safe for armorplate manufacturers and shipbuilders. . . . The terms of the Vinson Bill are made to order for the armament profiteer. The Secretary of the Navy may waive competitive bidding. He may also lend up to 30 per cent of the value of the contract at low interest rates to the shipbuilder".
Senator LaFollette, whom Vandenberg, Sept. 20, assured the Senate had more detailed knowledge of tax legislation than any other member, told the Senate that "the excess profits portion of this bill violates every principle of sound tax theory: 1. It raises no appreciable amount of revenue; 2. It is inequitable in that the small amount of revenue which it raises will be paid in the main by those corporations least able to pay while those corporations most able to pay are left untaxed; 3. It confirms and entrenches those corporations which possess a monopoly and quasi-monopoly position in our economy. If there was ever a tax measure which promises to perpetuate monopolistic corporations in their monopolies, it is this one."
LaFollette's weekly, The Progressive, Sept. 21, commented, "Monopolists and prosperous corporations will pay practically no increased taxes because of two 'jokers' in the bill. One joker is the provision allowing corporations optional methods in computing tax liability. The Treasury loses every time with this provision. The other joker is the so-called 'earnings method' of computing excess profits. Under this method, a corporation that has earned substantial profits