Evening star. [volume] (Washington, D.C.) 1854-1972, 1934-04-02
SENATE CONSIDERS
REVENUE MEASURE
Harrison Says Legislation
Includes Provision to
+. BaIk Evasion.
By the Associated Press.

BY the Associated Press.
The $330,000,00 revenue bill, de-
signed primarily to make 1t more diff
cult for the wealthy to avoid taxation,
was taken up by the Senate today
with an opening statement by Chair
man Harrison Of the Finance Com
mittee that it distributes the tax
burden fairly among taxpayers and In
no way impedes legitimate business
transactions
Harrison struck out at the personal
holding company or, as he called it,
incorporated pocketbook, by which,
he said. wealthy persons trimmed their
taxes from maximum of SO per cent
to the fiat corporation rate Of 13%
per cent.
To prevent such avoidance In the
future, he said the committee had
proposed surtax of IS per cent on
the first 100000 of undistributed net
income of such companies and 40 per
cent on all over 100000.
S20,O00.000 Estimated.
He estimated $4,000, 900 added rev.
enue from this source alone and fixed
the entire additional return for the
next fiscal year at SITS, 5000, as
against sl50,000 900 allowed by Presi-
dent Roosevelt in the new budget.
Fifteen amendments designed to
make drastic changes in existing law
were pending as Harrison expressed
the hope the bill can be promptly
passed and carried into effect"
II believe" he said, that the bill
effects series Of major improvements
in the existing law. The income tax
rates have not been greatly changed
and only one important new tax has
been imposed.
Nevertheless. by tightening up the
provisions of the present law, addi-
tional revenue will be produced which
the Government urgently needs.
"In my opinion, the great mass of
honest taxpayers. in the country will
approve of the action we have taken,
since we have attempted to make the
tax provisions effective upon all tax
payers alike and to put an end to the
various schemes and devices by which
some wealthy taxpayers were evading
the imposition of the income tax upon
them
Harrison said the bill would raise
an estimated $3.50, 000, 900 after all the
changes it makes have been in OPP
Grafton a full year, as compared with
S258, 1000, 900 in the bill passed by the
House.
Regarding the income tax structure,
he said the bill greatly simplified ex-
listing law by providing a fiat normal
rate of per cent on all net income
instead of the two rates of and
per cent now and by reducing the
surtax brackets from So to %.
Notwithstanding these changes"
he said, "the rates themselves are
very much the same as those Of the
existing law in the case of earned in
comes.
Increase in Surtax Rates.
1.-THE bill, however, considerably
increases the amount of taxes payable
on incomes derived from dividends
and interest on Government bonds,
which Is exempt from the normal tax
only. This increase is due to the
elimination of the 8 per cent normal
tax rate with corresponding in
crease in surtax rates.
although the surtax is technically
applied to 'surtax net incomes in
excess of $4,000, instead of $4,000
as at present, the personal exemption
and credit for dependents under the
bill may be used in the computation
of the surtax as well as in the COM
putation of the normal tax.
1.-THE net result is that in the case
of the single man the surtax rates will
in fact apply to net incomes in excess
Of $4,000. approximately, while in the
case of the married man with no de-
pendents the surtax rates will apply
to net incomes in excess Of $1,000, ap-
proximately."
Harrison said it was impossible to
stop the known instances of tax avoid
ance without causing hardship in
some cases." but on the whole he
thought the bill was perfectly fair to
the great mass of honest taxpayers"