Evening star., 1936-05-27

BY tho Associated Press.
Senate Finance Committee
Democrats were called to. a Sc
cret midday caucus today to con-
slider the latest presidential tax
suggestions received in a two
hour White House conference
last night.
One senatorial source outlined the
latest suggestions of President Roose-
welt to bring the yield of the dras-
tically altered tax bill up to the
amount the Chief Executive desires
es follows:
A Is per cent fat tax on all
corporation income, superstructure
of graduated levies on undistributed
corporate earnings and $4,000 ex-
emption for all corporations from the
latter.
The 4 per cent normal income tax
would be applied to all corporate divi-
dends and the capital stock and excess
profits taxes would be retained.
Supertax on Profits.
The supertaxeS on undistributed
profits would be Is per cent on un-
distributed adjusted net income not
in excess of 20 per cent. 35 per cent
on that in excess of 20, but not greater
than 40 per cent, and As per cent on
that in excess of 40 per cent.
Committee Democrats arranged to
assemble an hour and half before
the full committee was scheduled to
meet to receive Treasury estimates on
the newest corporate tax plan and
possibly a humber Of alternatives.
One Senator said privately the new
arrangement discussed at the White
House was a modification of plan
which originated with Mariner S.
Eccles, chairman of the Federal Re-
serve Board.
1t was so framed as to represent
somewhat of compromise between the
House and Senate versions of the tax
bill. The IS per cent fiat tax and
the $4,000 exemption are in line
with the plan worked out by the
Finance Committee, and the high
graduated levies on undistributed
earnings are similar to the House pro-
gram.
Sees Plan Aiding Agreement.
The President was represented as
believing acceptance of the new idea
would tend to speed an agreement
when the bill reaches the stage of
adjusting differences in conference
between the Senate and House and
consequently tend to expedite con-
! gressional adjournment.
Some Finance Committee members
said, however, they were prepared tc
stand by the bill as amended in COM
mittee. One added that he believed
there were enough votes to retain the
bill as it is.
The latest plan would work out In
this manner:
A corporation with 100000 of net
income would pay Is per cent tax, Of
$4,000 on the total. From the re.
naming $85, 1000 the $4,000 exemption
would be deducted.
Then if the corporation retained ur
TO 20 per cent of the $4,000 balance
or $4,000, it would be taxed Is pei
cent on the amount retained.
The tax would be IS per cent of any
income retained that Is more thar
$4,000, but not in excess of $4,000
of the $4,000, and As per cent on an!
portion retained in excess OF $4,000.
Leaders planned to call the Finance
Committee into session this aft.
ernoon, with the idea of seeing
whether more revenue could not b
raised. Senator King, Democrat. o
Utah, who is acting committee chair
man during the temporary illness O
Senator Harrison, Democrat, of Missis
sippi. limited the Z per cent rate nov
proposed for undivided profits might b.
increased.
The question of undivided profits
taxes. recently thought settled, thu
appeared to be opening up again, witt
prospects of lengthy discussion. Orig
inally administration officials callet
i. for a tax averaging 331a per cent or
such profits, but the Senate Financ,
Committee could agree only on fla
q ner cent.