Evening star., 1934-04-04
Rate of One Tenth of | Per
Cent Approved to Raise
$95,0O0,0O0 Revenue.
GATHERED
SURPRISES ATTACKED
Measure Provides for Heavy Sur
tax on Corporate Assets
So Identified.
By the Associated Press,

BY the Associated Press.
The Senate today approved, without
debate, tax Of one-tenth of l per
cent on the capital stock Of CORPORA
tlons, designed to raise an estimated
$4,000, 600 a year. Acting speedily on
the $3.50, 100000 revenue bill. the
Senate gave tentative approval to a
long list Of Finance Committee pro-
visions, including one levying a big
surtax on improperly accumulated
surpluses Of corporations.
The additional tax would be 25 per
cent on adjusted net income under
100000 and 35 per cent on that in
excess Of 100000.
The bill weathered its first test in
the Senate with q vote to retain a
provision subjecting to taxation the
anticipated income from annuities.
Reports Are Required.
The proposal would require annui-
tants, as soon as payments to them
begin, to report as income an amount
equal to per cent of the aggregate
premium paid on the annuity.
A substitute proposed by Senator
Hebert, Republican, of Rhode Island
to restore existing law requiring an
nuitants to report the interest only
after the whole principal has been
paid back was rejected SIS to "a.
Senator Austin, Republican, of Yer
mont lost an amendment which would
have changed the per cent to 2 per
cent and exempted annuities Of 81 900
instead of $500 as provided in the bill.
The next committee amendment ap-
proved would disallow deductions from
income of contributions made to any
organization for political purposes or
for lobbying on legislation.
Credit Allowance Raised.
Going through amendments pre-
viously passed over in rapid fashion
and with little debate, the Senate then
approved credit Of 10 per cent on
all earned income up to $4,000, as
against $4,000 in the House bill.
Chairman Harrison of the Finance
Committee said about S7000,000 in
revenue would be lost by the increase
to $4,000.
Reaching the excise clauses, quick
approval was given to a provision
repeating the present tax on soft
drinks.
Tentative approval was given q
provision to prevent tax avoidance
through corporate reorganizations. to
save the Government an estimated
100000
This provision modified the House
clause to provide a uniform rule for
reorganizations in all the States which
Harrison said would permit legitimate
business readjustments.
Consolidation Approved.
Two other provisions approved would
consolidate the various law Offices in
the Treasury under one general coun-
sci with six assistants all at $4,000
year and subject to Senate confima-
tion, and authorize appointments of
five new assistants to the Secretary
at SIC. 1000 each to assist in the admin
istration primarily of the currency
stabilization fund.
Senators King, Democrat, of Utah,
and McKellar, Democrat, of Tennes-
see, lost amendments to cut the sal
aries IN each group to $4,000.
Chairman Tydings of the Terri
tories Committee protested against the
proposed 3-cents-a-pound tax on
coconut oil and other vegetable and
fish oils coming primarily from the
Philippines and used in the manufac-
ture of soap.
Tydings said such a tax would be
a breach Of faith" with the Philip
pines since it just passed an independ-
ence act providing for a gradual eco
nomic transition.
Reed Disputes Point.
Senator Reed, Republican, of Penn
sylvania, said he saw no breach OF
faith since these commodities were
competing with the American dairy
farmers. He said the tax was "es-
sential."
A corporation capital stock tax is
now in force, but would expire July /.
Under the continuing proposal cor
porations would determine their own
stock valuation, but as guard
against differentiation an excess
profit tax of per cent would be levied
against earnings Of 1914 per cent.