Evening star., 1933-12-06
An Other States and Canada.
More Taxes.

A subcommittee of the House Ways
and Means Committee has drafted
plan of tax revision calculated to raise
an additional s237 100000 from in
comes. 1t does this through changes
In the surtaX rates and through stop
ping I'D the holes in the present law
through which a great deal OF income
escapes taxation in part or in whole
Public approval will run to those pro-
posals which seek to compel the per-
sons of great wealth to bear the bur-
den of income taxation at least on all
fours with the persons who have
smaller incomes. The country was
sstounded when it learned through the
INQUIRIES conducted by the Senate Bank
ing and Currency Committee that men
and companies of huge wealth were
paving little or no income tax, avoiding
the tax through legal means, but never
theless avoiding it.
The subcommittee has studied the
matter of tax revision, particularly With
reference to the administrative fea-
lures of the law, for many months, and
the report which has now been submit
ted to the full Ways and Means Com
nnittee is the result of careful consid-
Grafton, It proposes that the normal
income schedule be changed to make
the rate per cent on all net income,
instead of 4 per cent on the first $4,000
and per cent on the remainder OF
the net income. This is Offset. how
ever, by a revision of the surtax rates.
They start now at $4,000 and run
through So brackets with increased
rates for each bracket up to SIS per
cent on all income over sl,o0o,ooo. The
lowest surtax rate, from $4,000 10
$4,000, is one per cent. The revision
proposed. starts the surtax at s4,0oo,
with 4 per cent on incomes between
$4,000 and $1,000. and in n brackets
rises to SO per cent on incomes over
S1,Ooo,Ooo. These changes are esti-
mated to increase the revenue by $685.
600 900 annually.
The remaining $201 ,0Oo, 900 additional
revenue which the proposals OF tne
subcommittee are estimated to raise
cone from changes in the law as 1t ap-
plies to depreciation and depletion, TO
capital gains and losses, to personal
holding companies, to exchanges anu
denominations of companies, to the III
ing of consolidated" returns Ry corpora
tions which are affiliated" through 70
per cent stock ownership, partnership
losses and several other loophoies
through which the payment is now
avoided.
The report of the subcommittee lnol-
Gates that increased revenues through
taxation are needed; also that new
sources of revenue have been left Tor
future consideration. 1t makes it clear
that the added revenue from the repeal
of the eighteenth amendment, variousiy
estimated from $500, 900, 900 to $1,000
600. 900, is not going to be sufficient to
meet the needs Of the Government due
to the many new expenditures on &C
count of the recovery program. Tne
subcommittee says that before going
further into the matter Of taxation 1t
must hear from the Bureau OF the
Budget what funds are needed.
The subcommittee indicated that 1t
had given considerable thought to the
question of levying taxes on the vast
amount of wealth which now escapes
taxation because it is found in the form
of tax-exempt securities. This wealth
has been estimated as high as $36,Ooo,-
600 1000, and sometimes higher. The
committee, however, made no specific
report on this question other than to
indicate that in its opinion consti-
tutional amendment would be necessary
to deal effectively with this matter OF
tax-exempt securities.
It is clear that the question OF Federal
taxes Is to be major issue at the COM
ing session of Congress. The credit OF
the Government must be maintained. 1t
has launched huge projects in its re-
eovery program which must be paid for
out of Federal revenues. And the in
dication is that additional sums will be
needed and will be appropriated.