Evening star., 1932-04-06
MILLS OPENS FIGHT
FOR TAX CHANGES
At SENATE HEARING
Objects to High Corporation,
Stock and Estate LevieS
in House Bill.
FEARS TRADE REVIVAL
Z WOULD BE POSTPONED
Secretary Expresses Administra-
IA tons Objections to Sew
eral Features.
BY the Associated Press.

BY the Associated Press
Administration objections to the high
taxes on corporations. security trans
fers and estates, written into the new
revenue bill by the House, were put be-
fore the Senate Finance Committee to-
day by Secretary Mills.
The Treasury head said the rates
and some of the administrative changes
in the new bill would tend to "discour-
age the normal flow of capital into in
dustry and commerce at time when
business men are hesitant and industry
stagnant."
His testimony opened the series of
hearings which will precede action by
the committee on the bill framed by
the House.
The sections of the bill to which he
objected were: The increase Of corpo-
ration income tax to 1872 per cent; the
1b per cent penalty for filing conSoi-
dated returns for corporation afhliates;
the tax on dividends from corporations;
balancing of net losses of one year
against the profits Of the next; the
the taxes on stock and bond transfers.
ResubmitS Program.
The Secretary submitted again the
Treasury program which was given the
House Ways and Means Committee at
the beginning of its revenue delibera-
tions.
The great merit of the House bill,
Mills said, was that it would raise
S1,o30,o 900 900 in new revenue, but he
added it might be improved in num-
Der of important respects.
During the Senate hearings repre-
sentatives of the various industries
taxed under the bill are to be heard.
Then the committee will undertake re-
vamping the bill for presentation to the
Senate, and after it passes there con-
ference viii have to be had with the
House to reconcile the differences.
Then it goes to the White House
Secretary Mills called unsound the
provision which would subject dividends
from corporations to the normal tax
rates, contending it Disseminated
against the corporate form of doing
hardship upon the small corporation as
compared with a partnership.
Mills added:
That completely doing away with the
net loss provision of the revenue law
was hard to justify ''in times like these. :"
That the stock transfer tax is excess
sive under existing conditions.
That the estate tax rates are too
high.
Sees Business Discouraged.
THE cumulative effect of all these
provisions is very great" he testified.
ssrThQU tn weight
of each of them upon capital actively
employed in business, and to diScour-
age the normal flow of capital into in
dustry and commerce at a time when
BUSINESS men are hesitant and industry
stagnant.
Their combined restrictive effect,
magnified by the deadening influence
of the depression, will, in my judgment,
tend to retard business recovery.
What We want to accomplish above
all else at present is to break down the
vicious circle of deflation of credit, in
dustrial stagnation, falling prices and
loss of purchasing power. To put men
to work capital must go to work. Credlt
must be sought and freely offered.
But capital must see some chance OF
profit to compensate for the risk. Busi-
ness men will not borrow and banks will
not lend unless the enterprise offers
some fair prospect OF return.
yet the particular provisions to
which I refer, and which were written
into the bill at the very last minute,
certainly without any great considera-
ton, have definitely inhibiting effect.
ION the one hand, at period when
losses are only too real and too COM
mon, they would deny to business the
right it now enjoys to carry over the
losses from this year, very bad year,
to next year, which it is hoped will be
a better one; and on the other hand
the tax on possible profits is very greatly
increased"
Mills pointed out that declining in
comes had greatly weakened the income
Continued on Page 2, Column s.