Evening star., 1936-06-18

to point to the room where the con-
ference was being held and remarked:
There is somebody in there that Is
acting as a damned rascal"
1t has been revealed earlier that
the conferees had tentatively agreed
last night on the most controversial
angle of the proposed revenue bill.
End of Deadlock Hailed.
This was the question of taxing un-
distributed earnings of corporations
The tentative agreement was hailed
as the end of the long deadlock be-
tween legislators Of the two Houses,
which had passed markedly different
bills in response to President Roose-
Velt's demand for tax legislation.
Chairman Doughton of the House
eonferees expressed confidence that
by tonight I'VE shall be able to turn
the bill over to the drafting service"
After it is drawn, it must be ratified
by both chambers.
Although none of the legislators
ment, it was known it was reached
after discussion Of new compromise
proposal including:
A graduated normal tax on corpo-
rate income, the levy ranging from
8 to is per cent.
A levy ranging from or per cent
to 27 per cent on undistributed corpo-
ration income.
1t was revealed definitely by con-
hnt hn ALL 1. 4
yielded to the Senate and agreed to
impose a normal tax on net cor
porate income. Previously the House
had called for repeal of the present
normal tax, now ranging from 12l2
to IS per cent, and substitution of
q new graduated levy on net income,
ranging up to 4212 per cent and de-
pending on the percentage of income
withheld from distribution to stock
holders.
The Senate had voted only a per
cent tax on undistributed profits,
while calling for a normal levy of
15l2 to 18 per cent on net corporate
income.
The latest compromise made public,
with its graduated tax of or Z per
cent to 27 per cent on undistributed
profits, was closer to the House bill
than most recent compromise pro-
poSals. 1t also would retain consid-
cradle of the Roosevelt administra-
tion's tax philosophy, which holds
that undistributed profits should be
taxed stiff1y enough to force a larger
distribution to stockholders. who
would then pay normal individual
income taxes, as we'll as surtaxeS At
present dividends are exempt from
normal taxes.
1t was assumed that any COM
promise which comes out of the Sen
ate-HouSe conference would call for
the imposition of this normal indi-
v1dual income tax of 4 per cent on
dividends. because both chambers
have approved such a move.
The tentative understanding reached
last night on undistributed profits
taxes did not extend so far as to
embody specific figures. some con-
ferees said. These, it was said, would
depend on estimates from the Treas
ury as to what figures are needed to
raise the hundreds of millions needed
for the farm program and the added
cost Of paying the soldiers bonus
now.
Chairman Doughton expressed the
belief that Senate provisions for $50
100000 worth of increases in the
present individual income surtaxes
would be deleted from the bill if
enough money could be produced
without them
Special Treatment Pinned.
He said the conferees had agreed
tentatively on the question of giving
special treatment to debt-ridden cor
porations, but he did not disclose
what the agreement was.
The compromise laid before the
confereeS for discussion last night
would lay comparatively light tax
on small corporations which distribute
their earnings, but would impose
much stiffer levies ON big concerns
retaining their income.
The normal tax on net corporate
income would be graduated as fol-
lows:
per cent on the first $4,000.
IL per cent on the next $4,000.
13 per cent on the next SIS, 1000.
is per cent on all over $4,000.
On this would be superimposed q
graduated tax on undistributed in
come running as follows:
or per cent (still undetermined)
on the first 10 per cent:
IL per cent on the next 10 per cent
IT per cent on the next 20 per cent:
% per cent on the next 20 per cent.