The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1921-11-09
HOUSE c. 0. P. SPLIT
OVER SURTAX RATE.
IN REVENUE BILL.
Penrose Says Bill viii Be
Ready for President With
in Week-0therS Less
Optimistic


Washington. November s.-The
breach in the ranks of the House re-
publicans over the acceptance of the
Senate maximum income surtax rate
of SO per cent continued today to
widen.
House leaders sought to defer the
fight at least until after the rewrit-
ing of the bill by the conference gets
under way. but whether negotiations
to that end which were opened with
the insurgents" would be successful
remained to be decided.
IL the negotiations started today
terminate without an agreement, the
majority leaders plan to bring in a
rule TO force the bill to conference
without instructions to the managers.
In that event the republican '1nsur-
gents" and the democrats are pre-
pared to make a fight on the rule.
Losing in that they say they still
Will be in IA position TO renew the
fight when the House managers ask
for instructions.
House leaders are Understood to be
ready to accept a compromise on the
surtax rate at an increase of APP
proximateiy per cent over the 80
per cent maximum fixed in the bill
as II passed the House. Majority
leaders in the Senate also look for
ward to a compromise at around 40
per cent.
Penrose Optimistic
Chairman Penrose, of the Senate
finance committee. said today he ex-
pected the bill TO be ready for the
President next week. Other senator's
and some house leaders were less OPP
timistic. Estimates as to the time of
final congressional action ranged all
the way from ten days 10 three
weeks.
Treasury experts completed today
their estimates as to the revenue
which would be yielded by the Sem
ate bill. The total for this fiscal
year was placed at $3.z42, $4,000 as
compared with $3.50, $780, 700 under
existing law; that Tor the next Ifsca.
year at $2,71i,2sU,Ov0 and that for the
calendar year, 1923, at S2,726, 2S0, QUO
statement prepared by the ex-
perts and made public by Senator
Penrose said the technical and ad-
ministrative improvements in the bill
We're quite as important as the re-
auctions in specific taxes
The improvements in question
work In both directions" the state-
ment said. They close holes through
which taxes fairly due have hitherto
escaped; and they provide cushions
to protect the taxpayer in situations
Where profit ~ not really made, uui
only appears to be made.
Avoidance Through Gifts
Avoidance of the tax through the
device of gifts Will pe greatly re-
duced.
Necessary business readtustments
or congratulations which are now
blocked by the excessive taxation of
purely paper gains can be carried
through without premature collec-
non oi the tax. Farmer, miners and
olhers who realize capital gains,
winch in large majority of cases
nave been accruing through period
OF years, Will lie perntitIted to close
their deals and take their profits
without fear OF Lax unfairly made
prohibitiye by taxing as a lump sum,
In one year, profits which have been
earned over d series OF years.
The compulsory conversion Of
property into cash through fire,
shipwreck and the like will no
longer be held to result in taxable
gain when the taxpayers In good
AaAeh ihNests the proceeds of the con-
version in similar property and goes
on conducting business. as 1t were, AT
the old stand
Escape Double Taxation
American citizens and domestic
corporations engaged in business in
American possession will escape dou-
bic taxation and be able to meet Ior-
eign competition on equal terms.
The important amortizati ton reduc-
ton has been limited ~ claims made
In returns for the years 1918 and
1919 In connection With war plant ana
facilities.
The law relating TO refunds, cred
its and suits for taxes has been put
upon a fairer basis. In general. the
taxpayer will have four years In
which to make claim for refund and
five years In which to bring suits for
taxes. The treasury department, sim
ilarly, will hereafter have only four
years in which to change assessmen
and five years in which to bring
suits"