Evening star., 1933-12-17
Tax Recommendations.

LAX Observation-Disclosures.
The Treasury Departments first
recommendations regarding revision of
the present revenue law were submitted
on Friday to the House Ways and Means
Committee by DR.. Roswell F. Magill, the
departments new tax adviser. DR.. Ma
gill's statement to the committee was
made on the authority Of the Acting
Secretary Of the Treasury, Henry Nor
genthau, jr. 1t Endorsed In principle
some Of the proposals already made by
a subcommittee for tax revision, but at
the same time either disagreed with
other such proposals or asked for more
time for study. The Treasury Depart
ment favors stopping the leaks and loop
holes by which wealth has been able to
escape in part the imposition of income
taxes. At the same time it expressed the
fear that some of the changes in the
law advanced by the subcommittee
would be unjust to comparatively small
businesses and might be unconstitu-
tional, particularly as they proposed
a reduction by 25 per cent Of the actual
depreciation which may be charged off,
and might tend to retard business at a
time when increased business Is vital
The Treasury Department adviser
confined himself to discussion of pro-
posed amendments to the administra-
tive features Of the income tax law
and to discussion of the surtaxes and
the principle of lower taxes on earned
income than on income from invest
ments. If the department is to put
forward plan for new and additional
taxation it was not revealed at the
hearing. 1t was made clear, however.
that until the Governments budget
estimates for the coming fiscal year
have been disclosed and it is under
stood just how much revenue the Gov
ernment will require, the Department
will not be specific in regard to rates OF
taxation or sources of new taxation.
The aim of the Treasury head, it
seems evident from the testimony given
before the House Committee, is to make
the wealth of the country bear the
burden of increased taxes. A more
equitable distribution will be sought
along these lines. This does not mean,
however. that the man of so-called
moderate means, with an income Of
$4,000 to $4,000 a, year, is not to bear
a full share of this burden. While the
department is in accord with the plan
advanced by the subcommittee to have
one normal tax rate, and to increase
considerably the surtax rates beginning
after the first $4,000, the department
goes even further and proposes to al
low no personal exemption in the i'm
position of the surtaxes, except in the
payment of the normal income tax, on
the ground that any one with an in
come upon which surtaxes are leviable
should be able to meet this burden.
With reference to the deductions to
be permitted for earned income, the
mendation, but suggested that it should
be on a percentage basis of the earned
income, and that it should not operate
above $4,000. Furthermore, the de-
partment approves the proposal that
income tax returns for husband and
wife be joint returns, and that there
should be no permission to file separate
returns, as at present. This change in
the law, it is held, would prevent much
juggling by which income taxes are
sometimes avoided by persons of wealth.
The Treasury Department frowned
on a proposal of the Ways and Means
subcommittee. designed to increase
revenue by $S5,0O0,00O, to reduce by
25 per cent the allowances now per-
mitted business concerns for depletion
and depreciation, holding that it would
be unjust and probably unconstitu-
tional. 1t disapproved also the SUBJ
committees plan for measurement of
capital gains and losses. It took a shot
at the committees plans for doing away
with credit allowed income taxpayers
for income taxes paid abroad, for the
abolishment Of consolidated returns by
affiliated corporations and for abol-
ishing the right of partners in business
concerns to Offset the partnership losses
in making their income tax returns.
The object Of the committee in making
these proposals has been to hit at tax
avoidance. But the Department seems
to fear that greater injustice than ben
efitS might now result from such