Evening star., 1933-06-02
BY G. GOULD LINCOLN.

Elimination of the proposed in
creases in the normal income tax
rates, as carried in the public
works industrial recovery bill
passed by the House, was proposed
today to the Senate Finance Com
mittee by Chairman Harrison, as
that committee got down to work
on the bill in executive session.
Senator Harrison at the same
time presented a tax program OF
his own, calculated to raise the
1920, 900 900 needed for financing
the $3,SO0,Oo0,Ooo public works
program. In this program he
proposed to hit hard at private
banking houses, like that of ]. P
Morgan & Co., in order to raise
more revenue, denying to them
the right to write off security
losses in figuring their income
taxes.
The Mississippi Senator included in
his program also a tax on stock
dividends to be collected at the source.
This differs from the House bill pro-
vision which would make tax dividends
subject to taxation in the individual
income tax return.
He proposed the re-enactment Of
capital stock tax for q limited period. "
Revenue Estimated.
The House bill Increasing by three
fourths OF / cent per gallon the tax on
gasoline, Senator Harrison proposes To-
cut to u cent per gallon.
From the program which he proposes,
Senator Harrison estimates the follow
Tax on dividends withheld
at source ............ $40 ,000. 600
Capital stock tax.......... S0NoO,0 ,0OU
Administrative changes 49,. 15,OoO,O0O
Gasoline increase Of " cent
per gallon ..........s... 6z,O0U,uVo
Total .......... $227, ,o00, 900
The Harrison tax program at one blow
eliminates the much discussed ana mucn
disliked increase proposed by the House
in normal income tax rates, ana also
eliminates, to a large extent, the ngnt
for the imposition of a manufacturers
sales tax in this industrial recovery Dill
Il was held to be ShreWd move.
The chairman of the Finance Com
mittee said he had not consulted tne
White House IN regard TO his program
nor had he discussed 1t Win otner
members of his committee.
Senator Harrison said he believed his
program would spread the tax burden
more equitably with regard to the bene-
fits received under the industrial recoV-
cry bill. He insisted his program was
his personal recommendation 70 the
committed As head of that commlttee,
however, Senator Harrison has CONSIDER
able influence.
Deals With Morgan Hearing.
In his formal statement Of his plan
FOR additional taxes, Senator Harrison
dealt with the Morgan hearing now
proceeding before the Senate Banking
Committee. At those hearings 1t mas
been developed that the partners OF Js
P. Morgan & Co. paid no income taxes
in 1881 and 1882 because they were
able to write of their losses under the
capital issues provision Of the income
tax law.
In his estimate Of additional revenue
TO be raised by his program, Senator
HaTT1SO0 plaCeu GIle aQnluLStIbIAfS
changes" dealing with the changes in
the law as 1t relates to private bankers
and partnerships like that of the Nor
ran firm. at $l5,o00,000
The normal income tax increases
carried in the House bill, which Sena-
tor Harrison now proposes to eliminate,
raised the rate from to per cent on
the first $4,000 Of taxable income or any
part of 1t, and from to 10 per cent
on the second $4,000. These increases
the House estimated would bring in
$4,000. 900.
The inequity of increasing the nor
NAL income tax rates has been widely
commented upon, since these increases
would be felt heavily by men and
women Of moderate means and small
incomes.
Harrison's Statement.
Senator Harrison'S own description Of
bis tax program follows:
Certain changes in the taxing pro-
visions Of the industrial recovery bill
which in my opinion will spread the
burden Of this tax more equitably with
regard to the benefits received under
the bill and which, also, will return
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