GOVERNMENT: Windfalls' Windfall

Even before Congress began its FHA investigation, the Internal Revenue Service started looking into the matter of windfall profits on housing projects. BIR was not concerned about possible violations of FHA laws; it questioned whether windfall profiteers could call profits capital gains, taxable at only 25%, instead of straight income subject to taxes as high as 91%. In a test case, BIR protested the 1948 and 1949 tax returns of Long Island Builders Alfred and George Gross, Lawrence Morton and their families.

To finance the Glen Oaks Village apartment development in Queens, New York City, Gross & Co. got bank...

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