Evening star., 1935-08-11
Major Political.
Fight Seen
inChange.
$500 AND $4,000
PAY REACHED
468 Million Held
Revenue Total
Under Bill.
BY JOHN c. HENRY,

The skeleton of sweeping increases
in taxes today is rattling in the
closets Of the New Deal.
Kept out of sight for months while
Republican foes shrieked that only
higher taxes could ever meet the ex-
travagant spending habits of the
Democratic administration, the skele-
ton was exposed for the first time
yesterday when the Senate Finance
Committee voted to broaden its pend
ing tax legislation to a point where
every single person earning as much
as $500 and every married couple
having net income of $4,000 would
be affected.
Revised in several other major pro-
visions, the legislation, now calcula-
ted to bring the Federal Government
approximately s46S,0O0,oOO additional
revenue. will be reported to the Senate
tomorrow or Tuesday. Political opin-
ion differs as to the fate of the mea
sure there, but virtually a unanimity
OF opinion exists that the House, more
finely attuned to the immediate re-
action of the voting taxpayers. will
shrink from enactment of a bill sure
to cost SO many people money
Recommendations Ignored.
Further removed from the Presi-
dents recommendation than was the
legislation approved by the House, the
principal features of the Senate's tax
bill are:
% The normal income tax exemp-
ton for unmarried persons is reduced
from 81 900 to $500 and that of mar
ried couples from s2,500 to $4,000.
Exemption for dependents remains at
S400. with the age limit of such de-
pendents raised from Is to 20 years.
90 Surtaxes will begin at the So 900
net income bracket instead of $4,000
as at present. The rate, always to be
added to the normal income tax rate
of per cent, will be per cent for
$1,000 between $4,000 and $4,000 net
income. Prom this point up the rate
will increase by at least per cent for
each $4,000 of added net income. At
the $4,000 income bracket, where the
House bill made so bold as to Jump
the existing rate from 80 to 81 per
cent, the Senate Finance Committee
bill will call for 40 per cent surtax.
AS the income gets into the millions,
however, the Senate bill falls into al
most complete conformity with that
approved by the House, the rate on
incomes between $1,000000 and 81
600 900 being 70 per cent, while that
on incomes above $5,0o0,000 yearly
will be rs per cent
(3) Existing estate taxes, with the
exemption lowered from $4,000 to
$4,000, are doubled in the lower
brackets and are graduated as high as
$4,000, 900 where the tax will be 10
per cent. The rate on the first $4,000
taxable will be per cent instead Of
per cent as at present. That on an
estate of $4,000, 900, the highest point
at which graduation of rates is now
continued, will be 81 per cent instead
Of so per cent.
Inheritance Taxes Out.
In arriving at this decision to boost
estate taxes, the Senate committee de-
cided to abandon the entire program
of inheritance taxes, a provision spe-
cif1cally requested and given great en-
phasis by President Roosevelt and car
ried out by the House. It was on this
issue that the Senate group took its
only record vote of the two-day delib-
erations, the count being II to 8
against levying inheritance taxes.
The Senators lined up as follows on
this question:
Against inheritance taxes-King of
Utah, George of Georgia, Walsh of
Massachusetts, Gore of Oklahoma
Bailey of North Carolina. Byrd of
Virginia, Lonergan of Connecticut and
(See TAXES Page AZ