Du Pont Collects

Among the inequities of the World War II excess profits tax was the definition of "normal earnings" as the average profits for the years 1936-39. Anything over the average was taxable at a maximum rate of 90%. Many corporations complained that the base was unfair since they had been pouring money into expansion or new products during the '36-'39 period, thus their earnings were smaller than normal. For them, Congress left a loophole in the act: section 722. It provided for a rebate for corporations who could prove their 1936-39 average abnormally low.

Last week Du Pont reached through the loophole and pulled out a rebate of $29 million, the biggest E.P.T. repayment so far. Du Pont argued that during the base period it had poured millions into expansion for nylon and other new products which it did not start selling until 1939. Thus, a substantial part of its war profits was not "excess profits," and was "plainly not attributable to the war economy."

Still awaiting settlement under section 722 are some 53,000 claims totaling $3 billion.

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