Evening star., 1936-05-01
BUSINESS BRANDS
TAX BILL UNSOUND
TO SENATE GROUP
Edmonds Expresses View of
Philadelphia Chamber
Before Committee.
TREASURY DENIES
SURPLUS AIDS IDLE
La Toilette Asks Increase in Sur
tax on individuals to Raise
$226, 100000.
BY the Associated Press.

oy tiic hooOSAetSA itoos
Business opened fire on the admin
istration tax bill before the Senate
Finance Committee today when the
Philadelphia Chamber of Commerce
branded 1t IAN unsound piece of legis-
lation.'
The Philadelphia chambers view
was expressed by Franklin Spencer
Edmonds. chairman of its Committee
on Taxation and Public Expenditures.
The tax program was condemned in a
resolution by the convention of the
Chamber of Commerce of the United
States. which adjourned last night.
Before Edmonds took the stand, the
Treasury had completed its defense of
the bill with a fiat denial that cor
porations in the aggregate had used
surplus accumulated during boom
years to provide employment during
the depression.
Haas Is Questioned.
George C. Haas, Treasury research
director, who voiced the Treasury con-
clusion en- the basis of internal reve-
nue. figures, was closely questioned by
Senators and challenged on some
points by Senator Bailey, Democrat. Of
North Carolina
The latter contended the Treasury
figures showed reserves had been used
to keep plants running instead of 60
ing into bankruptcy.
Edmonds said the plan to tax un-
divided corporate earnings was ifs
cally unsound" and does not meet
the necessities of the American people" :"
He asserted the business interests Of
the country were compelled 'in self
defense" to oppose all new forms Of
taxation. until every extraordinary ex-
pense," except that for unemployment
relief. was eliminated.
Edmonds' Contention.
Experience had shown, Edmonds
contended, that in larger corporations,
the accumulation OF surplus had
tended toward stability in dividends.
provided the average ( net earnings
is maintained"
Bailey challenged a contention by
Haas that corporations would have the
same opportunity under the bill, as
they do now, to accumulate reserves
during prosperous years.
Senators King. Democrat, of Utah
and George. Democrat, of Georgia also
questioned Haas somewhat critically.
Senators Conally. Democrat, of Texas
and Barkley, Democrat. of Kentucky
aided the witness on occasions.
Haas argued that under the bill cor
porations could retain from 80 per
cent to 40 per cent of their income
without paying any more taxes than
at present.
while your statement is true" Sen
ator Hastings, Republican, of Della
ware intervened. the corporation
would pay in taxes so per cent of the
amount retained"
replied.
Before today's hearing. a proposal
to raise S226, 900 900 a year by increas-
ing surtax rates on individual incomes
was advanced by Senator La Toilette,
Progressive, of Wisconsin to help close
a revenue gap between the House tax
bill and President Roosevelt's request.
La Toilette offered his plan as
members of the Senate Commit
ate began a search for new revenue
in response to Secretary Morgenthau's
demand that they raise the full s5l7,-
100000 lost when this years A. A..
A. processing taxes were invalidated.
Treasury experts estimated the
House tax bill would raise $500, ,000,-
900 of permanent revenue annually,
but only S180,0o0,o00 of the $5l7.-
100000 of temporary revenue asked
by the President. Chairman Har-
riSon of the Senate Committee said
the deficiency would have to be met
and indicated he had found way.
Harrison would not discuss his
plan. 1t was understood. however.
that it was not the new levy of
processing taxes on commodities that
President Roosevelt suggested as the
means of raising the temporary
revenue
La Toilette had Treasury estimates
showing his plan to start the present
4 per cent surtax on incomes of more
than $4,000. instead of more than
$4,000, as in the existing law. would
raise the needed revenue, with the
surtax running up to IS per cent
on income in excess of s5,000.000.
He was determined to push this
program as an alternative to process
ing taxes, contending the latter were
nothing more than sale taxes on