Evening star., 1935-07-31

corporation surpluseS. Harrison said
he hoped such an amendment would
not be offered now, since the execu-
tive only suggested it for study.
Bill Hit rs UnsOund.
Because of reported inability Of
Secretary of Treasury Morgenthau to
appear until tomorrow morning, Noel
Sargent of the National Association
Of Manufacturers was the first witness
before the Senate Finance Committee
Quoting several tax authorities and
former Democratic secretaries Of the
Treasury, Sargent directed his fire at
graduated corporation taxes and ex-
cess profits taxes.
OF the former. Sargent declared:
The proposed tax would be eco
pomically unsound, since 1t would
penalize industrial efficiency. The tax
is socially unsound because it would,
if continued over any long period of
time, result in increased living costs
TO consumers. resulting in lowered
living standards and decreased en-
ployment opportunities for workers.
The graduate corporation income tax
Is a tax upon millions of individual
stockholders. irrespective Of their
ability to pay"
Railroad Rate Supported.
r. v. Fletcher of this city, repre-
senting the Association of American
Railroads, followed Sargent on the
stand.
"As introduced in the House" !"
Fletcher said, the bill deals very
fairly with the railroads. We pre-
viously have had the privilege of FL
ing consolidated returns by paying a
1884 per cent tax rather than the
1874 per cent.
This is provided in the House bill.
II would like to say, however, in
the matter of excess profits tax that
corporations should have privilege Of
declaring new value"
Under the present revenue law,
corporations were allowed to make
their own declarations Of value, this
valuation not to be changed.
Senator Connally, Democrat, Of
Texas asked If invested capital might
not be fairer basis for uniform valu-
alton of corporations. and Fletcher
agreed it might.
Excess Profits Tax Hit.
H. B. Spalding. vice chairman Of
Taxation Committee Of the National
Association of Manufacturers, was the
third witness.
Spalding declared that the excess
profits tax as operative during the
postwar period was unfair and COM
plicated in administration.
AN excess profits tax discriminates
unduly against corporations Of f1uc-
tuating profits.
This law Is an enormous lottery
in which the Government is on one
side of the table and stockholders Of
corporations on the other"
Continuing the attack on the legis-
lation in its present form, M. L.
Seidinan of the New York Board Of
Trade appeared to urge a widening
Of the general tax base as a means
of improving the tax structure.
At the same time, however, he
charged that tax legislation Of the
type proposed by the President and
introduced in the House it an entirely
new and dangerous philosophy oi
taxation.
Wants Budget Balanced.
Some extracts from Seidman's testi-
mony follows:
THE message. quite apparently, is
not a fiscal document, but state
ment Of social and economic philoso-
ply with regard to taxation It is
in fact q complete and unqualified
Endorsement of the use of taxation
for non-fiscal purposes. Approval Of
such a measure by Congress would
imply the acceptance Of a philosophy
of taxation having the most far reach
ing implications.
"The New York Board Of Trade Is
strongly for increased taxes. It insists
however, that any new revenue legis-
Iation, If enacted, should be solely