The Birmingham age-herald., 1921-08-17
HUGE SLICES TO BE
 CUT FROM TAX BILL
 F0RONEY ASSERTS
CContinued From Page OncI

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 to prevent tax evasion. He informed fthe House that under existing law the payer might improperly reduce his surtaXes by changing his fiscal year, thus splitting his annual income in two parts. TO prevent such an eva sion. he said the bill provides chat in ease of return for q period for less than one year the net income shall be placed on an annual basis and the surtaN properly computed thereon ip accordance with the num- Der of months in such period. To BaiI> Evaders To prevent evasion of tax through the medium of wash sales" Mir. Fordney said section had been put in the bill to limit deductions for losses by providing that no deduc- ton should be allowed for losses sustained m the sale of securities where the taxpayers at or about the time of such sale purchased identical securities.
 The provision \of the present law dealing with surtax by corporation organization, the report said is re- vised to meet the decision of the supreme court in the stock dividend case There would be imposed on corporations of this character a flat additional income tax of 20 per cent of the net income, but if the stock holders agreed, they might be taxed upon their distributive shares in the net income of the corporation in the same manner as members of part nership. such taxes to be in lieu or all income taxes upon the corpora tion.
 Mir. Fordney said some mortgage
 .!.- ,.s1 obtaining exemptions allowed by law to building and loan associations by operating under the guise of such associations To prevent such evasion of tax, the chairman explained, the exemption had been limited in the new bill to domestic building and loan associations operated exclusively for the purpose of making loans to members"
 Democrats In Caucus
 The democratic caucus began in the late afternoon and after q recess was continued tonight Representative kitchip, ranking democrat on the ways and means committee, who IS detained at his home in Scotland Neck, N C., by illness, sent a tele- gram to the caucus, urging solid democratic opposition to the republi- can measure. He has been kept fully informed as to the provisions of the bill and events during ts prepara- ton and expects to review in a mes- sage to be sent to democrats tomor- row.
 Ways and means committee demo- crats in preparing their minority report which they have until Friday to file, will make use, it is under stood of especially prepared tables report which they have until Friday to file will make use, it is under stood of especially prepared tables showing comparative taxes under the present law and under the repub- lican measure They will undertake to show that individuals having in- comes ranging from s5,000 to $66,- 900 a year will pay the same taxes as at present. whereas those having in- comes exceeding $66,000 will get re- auctions ranging from 1 per cent to 50 per cent.
 The democratic report also will claim, it is said, that corporations having net profits of from to ID per cent will pay as much or more under the proposed 121a per cent corporation tax as they do under the excess profits and 10 per cent or more will be granted reductions on graduated scale which will amount in some cases to as much as 65 per cent.
 Representative Frear of Wisconsin, republican member of the ways and means committee, plans to file d supplemental majority report, sug gesting taxation of the undivided profits of corporations and other sources of wealth as recommended to Congress last year by Secretary Houston. It is understood that MT, Frears purpose is not only to bring these matters to the attention of the House, but also to the Senate finance committee, which is to take up the bill soon after it's passage by the House so as to have it ready for the Senate when the proposed recess or Congress ends late next month.
 The democratic caucus adjourned late tonight until 10 a. m., tomorrow without final conclusions having been reached. It was understood that most of the four hours of discussion this afternoon and tonight centered around the construction of resolu- ton which would bind the minority members to vote solidly against the bill
 The resolution was drawn after the caucus had considered the telegram from Representative Kitchen. who urged solid opposition against the measure.