The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-13
SENATE DROPS
HIGHER TAX ON
Low INCOMES
Stormy Debate Looms as
Revised Bill Goes
to Floor.
SURTAX RATES liked
Committee Does About-FaCe
on Proposal to Soak
Everybody
BY II. o. THOMPSON
United Press stan CorreSnondent

WASHINGTON. Aug. l3-A tax
bill revised TO conform more closely
to President Roosevelt's recon-
mendations for levies on wealth was
projected today into what promised
10 be a stormy Senate debate.
The sharp division Of opinion was
illustrated in the laSt-hOur elm
inatIon Of newly proposed taxes on
low bracket incomes and the slap
ping of additional surtax rates on
$1,000 900 earnings.
The Senate Finance Committee.
which earlier revised the bill to IN
clude small incomes and then re-
versed itself formally laid its tax
proposals before the Senate. The
bill. as recommended without a rec
ord vote, was designed to transfer
the tax burden 10 those with greater
ability to pay.
Revision to Speed Action
The late revision, 1t was be-
lieved, viii expedite passage of the
bill. despite inSiStence of vOcif-
erOus Senate group demanding 1t
be made to provide more revenues.
Senator Pat Harrison ID, Miss a..
chairman of the Finance Commit
tee, arranged the committees report
so that If possible the bill could be
taken up in the Senate today. He
said, however, that he expected de-
bate to start tomorrow.
Il think the bill is greatly i'm
proved and more in keeping with
the Presidents recommendations, -
Senator Harrison said.
The committee climbed down has
tily from its proposals that the
lower income brackets be required
to pay increased taxes. The COM
mittee reached that conclusion Sat
urday. but a weekend of reaction
from the country and from polite
allymmded House leaders caused a
sudden about-face.
The lowered exemptions approved
Saturday were rescinded. leaving the
rates in the lower brackets undis-
turbed from their present status.
Higher Brackets Target
As a result of this quick turn
about. it appeared likely that the
committees decision against impos-
ing new. levels on the less well-to-dO
classes would be supported by the
Senate. and that the tax bill as it
finally emerged would be aimed
only at those in the higher brackets.
There is little difference in reye-
nue. possibilities between the bill
passed by the House on Aug to
the one reported by the Senate
Finance Committee yesterday.
The House bill could be expected
to raise $3.50 00O.0 600 in new revenue
and the Senate bill S249 .O0O, 900.
This is barely enough to run the
government for a fortnight and rep
reSents a sharp recession from Sat-
urdav's finance committee decision
to make the measure a real revenue
raiser.
The main differences between the
House and Senate bills are in the
inheritance tax and surtax fea-
lures.
100000, 900 Is Difference
The House bill imposed new in
heritanCe tax schedules which the
Senate Committee struck entirely
from the bill
The House measure increased sur
taxes at the $4,000 level, but the
Senate bill retained the present sur
tax rates up to S1000000. From
S1000000 on the surtaxeS in the
Senate version would be increased.
going mp to IS per cent. The pres
ent Surtax rate stops at 50 per cent.
which is applicable TO all incomes of
Sl.000O00 or more.
Rejection of the La Toilette levies
against the lower incomes cost a
potential S22O.000O0O in new rev.
enueS To make up for that, the
higher SurtaxeS were adopted.
The committee got back closer to
the Roosevelt suggestions also in
providing for an intercorporate divi-
dend tax. which was not included in
the House bill.
Under present laws. dividends
from other corporations have been
exempt from taxation. Under the
Finance Committee version. only IS
per cent of the dividends would be
exempt. leaving Is per cent against
which taxes could be levied.