Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-07-09

it be primarily for the purpose of
bringing our national budget nearer
TO a balance, let it avoid any impli-
cation of class legislation, and let it
be paralleled by an application Of the
brakes on reckless spending Of Gov
eminent money"
The Presidents new tax program
encountered q protest. meanwhile.
from the leadership OF the American
railroad industry.
Inconsistency Charged.
Robert v. Fletcher. general counsel
for the Association of Railway Execu-
tiveS, contended the graduated taxes
the President wants to apply to cor
porate income would penalize bigneSS
in the railroad field after Congress
had encouraged mergers.
Fletcher prepared a formal argu-
ment for submission to the House
Ways and Means Committee. which
yesterday heard estimates that 20 al
tentative schedules based or a four
fold tax plan advocated by the Presi-
dent would raise anywhere from sll8,-
0O0,00 to 1901 900 900 a year.
Secretary Morgenthau, who had re-
ceived from committeeman a list of
the different schedules with q request
to say how much revenue each would
raise. outlined the estimates.
He suggested taxes would apply to
inheritances. gifts, high incomes Of
individuals and corporation incomes.
End Sought This Week.
The committee is trying to finish
hearings this week so 1t can 60 to
work Monday to decide which of the
20 schedules, if any, it should approve.
Fletcher. the railroad spokesman,
argued against applying to the rail
lines the suggested new graduated
taxes. which would range from 10 to
171a per cent, depending on size of
income The present rate is a fat
13A per cent.
1T seems to me-" Fletcher said,
that Congress already has shown
clearly in many legislative acts that
it thinks rail carriers should be big
concerns, financially. It has approved
mergers and done other things to con-
centrate railroad capital and income.
And now it apparently is proposed
that Congress penalize railroads for
doing the very thing 1t encouraged
the railroads to do"
Morgenthau had estimated that the
10-to-171a schedule would raise $685.
s00, 900 to $1o2, 200, 900.
Under 100000 Incomes Spared.
A subcommittee which presented the
20 schedules to Morgenthau appar-
emily felt no attempt should be made
to increase taxes on individual in
comes under 500. 900, for no sched-
ules went below that.
At present, income between $10o, 900
$50, 900 is subject to Q maximum tax
of Sc per cent. One of the new sched-
ules would increase that to So and
another to SO per cent.
The larger changes, however, would
be on income above $4,000 which
now is assessed fiat 50 per cent.
One proposed schedule would make
income between 100000 and ST.
600, 900 subject to a 81 per cent levy,
another "a per cent and a third Is
per cent.
In one case, the portion of an in
come in excess Of $l0,000,00o could
be taxed "a per cent and income
from $7,5oo, 900 to sl0.0oo.0o0 could
be taxed 90 per cent.
Gift Taxes Flexible.
Inheritance and gift taxes also
offered some interesting alternatives.
There Is now no Inheritance tax
and the gift levies range from 0.7o
to 3Sk, per cent. One pending sched-
ule would set both the gift and in
heritance taxes at from 7 to 1886
per cent, depending on the amount
involved.
In one case the inheritance rate
would depend on the income the re-
cipient Of o legacy already had.