Evening star., 1935-08-20
CONFEREES ADOPT
REVISED TAX BILL
FOR ESQ MILLION
Ban on Free Federal Securi-
ties and Silver Proviso
Lose Out.
SURTAX RATE TO START
AT $50, 900 NET LEVEL
Individual Levies to Increase to
rs Per Cent Maximum on All
Over $10,000,000.
BY JOHN c. HENRY.

The many times revised administra-
ton "soak-the rich" tax bill under
went a new operation this morning
and came out Of conference in final
agreement on form calculated to raise
about $3.50 100000 extra revenue.
In reaching their agreement House
and Senate conferees agreed to COM
promises on several major provisions
of the bill, but decided on outright
elimination Of the Borah amendment
to ban further issuance of tax-eXempt
Federal securities and the McCarran
amendment repeating certain sections
Of the silver purchase act. They
agreed also on the Senate substitution
of increased estate tax rates rather
than new inheritance tax
On the controversial provision of
individual surtax rates. the conferees
agreed, it was announced. on the
House schedule. under which surtax
rates would start to increase at the
s50,000 net income bracket. The
Senate bill had started the increase
at the sl,000,000 bracket on the
ground that such was the wish of
President Roosevelt. d.
Ratio Runs Up to IS Per Cent.
The House schedule, jumping the
rate on the s50,000 bracket from 80
to 81 per cent. runs up to maximum
of rs per cent on all net incomes
over $l0,000000. 1t was estimated
that s45,00O,000 additional revenue
would come from this section.
In the case of the intercompany
dividend tax. imposed in the Senate
and requested by President Roosevelt,
the conferees reached compromise.
BY its terms the regular corporation
taxes would be applied to 10 per cent
of the income from intercompany divi-
dends. The Senate bill had applied
these taxes to IS per cent of such
income, while the House bill had
levied no such tax. The tax thus
amounts to about l u per cent on all
such income.
It was estimated that this provision
will yield about $4,000 900. The
original Senate yield was figured at
s39, 100000.
Corporation Rates Compromised.
A compromise was reached on the
graduated corporation income taxes
with the rate now ranging from 1919
per cent to IS per cent, whereas the
Senate rates have been 1872 to ISL.
per cent and the House rates we're
1874 to 14A per cent. The present
rate Is fiat 13A per cent.
Under the compromise, the 121a
per cent rate will apply to taxable
corporation income up to $4,000; from
there to $4,000 the rate will be 13
per cent; from there to $4,000 it will
be IA per cent, and from that point
up it will be Is per cent
The estimated revenue from the
altered provision will be s35 1000, 900
where the Senate bill figured to raise
$4,000. 900 and the House bill only
100000.
In further taxation upon corpora
tions. the conferees reached agree
ment on an increase in the capital
stock tax to set the new rate at S1.40
per 1000 Of adjusted declared value.
The House bill did not impose any
increase over the present rate of 81,
but the Senate lacked this tax up to
sl.50.
The compromise is calculated to
bring in s4400o,000 additional. as
compared to the s55,00O,0O0 figured
on in the Senate measure.
Excess Profits Rates
The House conferees receded from
their plans for new excess profits rates
and the Senate schedule was approved.
This would apply tax Of s per cent
on profits between 10 and Is per cent
on the declared valuation and of IL
per cent on profits above that level.
The house had range from to 20
per cent on all profits in excess of 8
per cent. The present rate is a fiat
S per cent on all above 1917 per cent
profits.
In this same provision, the House
agreed to the Senate amendment by
which corporations would be allowed
the privilege of declaring a new valua-
ton.
This section of the bill is expected
to raise an additional $l0,00O,0 900.
1t was announced that the House
conferees had receded from their in
sistence on the inheritance tax pro-
vision as requested by President Roose-
Velt and included in the bill when it
ICon III vNC