Evening star., 1933-06-02
NEW Plan DROPS
INCOME TAX RAISE
Harrison Offers Program for
Financing Recovery
Measure.
tcOntInued Prom Tlrst page.l

(Continued From First Page.l
revenue more promptly and with equal
Certainty, VIII be suggested by me.
First, the increase in the normal rates
bf income taxes can be eliminated and
other more equitable taxes imposed.
Second, w!iie favor tax on divi-
dends on corporate stock, 7 believe that
this tax should be collected at the
source at the time the corporation pays
the dividend rather than waiting for
the individual to pay the tax when he
receives the dividend. Deducting the
tax at the source has the advantage of
subjecting to this tax dividend paid to
non-residents who now can too easily
escape tax.
Third, in view Of the revelations in
connection with the Morgan inveStiga-
&ion, believe we should eliminate pri-
vate bankers from the exemption pro-
yicelY for such bankers in the security
loss section of the revenue act Of 1882.
Section % (r) denies the deduction
from ordinary income of losses on stocks
and bonds held for two years or less,
except in the case of incorporated banks
and trust companies, dealers in Securl-
ties and private bankers. 1t is be-
Iieved private BANKERS should be denied
the privilege of daEiucting these short
term losses from their ordinary in
come.
The Partnership Tax.
'Tn the fourth place, favor amend
ang existing law so as to deny the IN
dividual the right to take up on his
personal return the distributive share
OF any partnership losses. Under exist
ing law, partnership pays no tax but
the partners include in their income
the distributive share whether dis
tributed or not) Of the partnership prof.
its. In the case of partnership loss,
the individuals take up their propor-
tionate share of such loss In view o.
the fact that the stockholders Of
CORPORATION can not take up on the
returns any portion of the corporate
losses and because such losses can not
be carried forward into the next year in
the Industrial recovery bill. it does not
appear unfair TO take this advantage
away from the membess Of partner
ship. This action wofiid have very
great effect in a case Mn1ilar to that
brought out in the Morgan testimony.
Fifth, to meet the existing emer-
eency, 1 am forced to recommend the
re-enactment of the capital stock tax
FOR a limited period This tax at the
low rate of 1J10 of / per cent upon
the par value of corporate stock should
WELD approximately $4,000, 900 in
revenue 1t would be easily admins
tered, its burden comparatively light,
and its yield certain. The amount to
be paid by the corporation is relatively
small in proportion to the benefits to
be received from the industrial recov-
cry bill Under this tax, a $4,000 cor
poration would only pay $40 per annum
and even a 81 ,00O, 900 corporation would
only pay 81 900. This tax is not an
income tax, but is an exctse tax based
on the privilege Of doing business In
the corporate form.
sixth, the necessity for revenue also
forces me against my natural inclina-
ton to agree to an additional tax on
gasolinc. I believe, however that the
additional rate proposed by the House
OF "a II / cent should be reduced to
II Of / cent per gallon.
Report Seen Next Week.
''Ssuch a tax program as I have de-
scribed will force some Of the private
banking concerns to pay q fair pro-
AbAO44 IA O4A GdA 0AA 0CAA Va ~ WAL
force their incorporation so that they
will pay at least as much tax as our
ordinary corporations. Such pro-
gram win also eliminate the necessity
Of increasing normal income taxes or
ssirtaxeS and will raise SUFFICIENT reve-
nue. to finance' the public construction
program proposed In the industrial re-
covery bill"
Senator Harrison concluded with his
estimates of revenue under his program
already given and added that the in
dustrial recovery bill only requires an
annual revenue of $500, 100000 to carry
out its provisions His plan leaves a
margin of 100000.
The Mississippi Senator said he ex-
pected also to recommend an extension
OF the income tax law which provides
for a slightly higher rate Of tax on
consolidated returns" as in the case
OF returns Of chain stores and corpora
tions and their subsidiaries.
The Administration proposed amend |
nlent to the recovery bill, dealing with
control of the oil business, he said he
would offer in committee
Senator Harrison hopes to have the
bill ready for report to the Senate early !
next week so that it may be taken up
FAOulptly. LIE EUlduC6 OOulIIllLt6e, nav
ing concluded its hearings, is holding |
today executive sessions on the measure. |
The Finance Committee is expected
TO give thorough study TO complaints |
sgainst the industrial licensing and
labor protective clauses in the kill, but
any changes in these sections
viii ba. made Harrison would not indi-
GatA
Labor Section Attacked.
Robert P Lamont, president of the
American Iron g. Steel Institute and
former Secretary of Commerce, told the
committee yesterday the section per-
Knitting workers to join any labor union
they choose and barring employers from
requiring employees to join company
unions was too indefinite and open to
snisinterpretation.
Lamont said the steel industry
Stands positively for the open shop, IS
fnalterably opposed to the closed shop,
and for many years has been and is
now prepared to deal directly with its
employees, collectively, OH all matters re-
Jating to their employment"
He added, however, it was opposed to
conducting negotiations regarding such
matters otherwise than with its own
employees and was unwilling to conduct
them with outside organizations Of
labor or with individuals not its en-
J3loyes"
Taking sharp issue with Lamont,
John L. Lewis, president of the United
Mine Workers of America, said there
IS no open shop In the steel industry"
and IF any shop exists in the industry
its closed shop-closed to the man
who wants to belong to a union"
Indorsing the bill on behalf Of Or
aNwAal ~