Evening star., 1936-04-29

BY the Associated Press.
The administrations $803 ,000,-
900 tax bill was passed by the
heavily Democratic House today
over opposition votes of the Re-
publican minority.
Speaker Byrns announced the vote
as 267 to 80.
The bulky measure, designed to raise
funds to meet bonus and farm relief
costs and embracing a complete revi-
sion of the corporate tax system, now
goes to the Senate where the Finance
Committee already has begun its con-
sideration.
Tomorrow, Secretary Morgenthau
will testify before the committee at its
first public hearing.
A somewhat warmer reception
awaited the measure in the Senate
committee than it would have received
last week. Criticism of the proposal
was less in evidence among the Demo-
cratic Committee members and many
Of them were forecasting its approval.
Tax on Corporate Income.
The major feature of the bill was a
tax on corporation income graduated
on the basis of earnings withheld from
distribution to stockholders.
Linked with application of the nor
NAL 4 per cent income tax on divi-
dends, it is expected to bring in $685.
100000 additional to help meet Presi-
dent Roosevelt's request for farm and
bonus funds.
The vote, on passage, cleft along
party lines, was mere formality
which sealed the tentative approval
given the bill yesterday. With only
four changes-all proposed by the
Ways and Means Committee, in charge
of the legislation-the 236-page meas
ure had been hustled through the
amendment stage with such speed as
to give rise to protests of unfair" and
"steam-roller" tactics.
Will Remove Lo0phOles.
It's hackers claim it will lead to more
equitable taxation, particularly as be-
tween corporations and partnerships.
and at the same time remove the
greatest loophole for tax evasion-the
ability of individuals to avoid high
surtaxes on incomes by impounding in
come in corporate surpluses.
Republicans contended the bill
would shake the stability of business,
tend toward creation of monopolies
and fall far short of its estimated
yield. They have branded it danger
GUS, unsound. vicious and radical
In addition to the revenue to be pro-
duced from the new corporate tax
plan. S100,000,000 is expected from an
80 per cent "windfall" levy on process
sors who did not pay A. A. A. process
ing taxes and s83.0o0.o00 from tenn
porary continuation of excess profits
and capital stock taxes.
The latter ultimately would be re-
pealed, along with the present cor
porate income tax of 1872 to IS per
cent.
The new corporation rates would
range up to 2912 per cent for corpora
tions with taxable income of $4,000
or less and up to 4212 per cent for
those with larger net earnings.
Special Concessions.
Special concessions in the form of
fiat rates have been made for corpora
tions which must use some of their
income to retire debts or meet def
cts, and those in receivership.
Banks, trust companies and insur-
ance companies, which are required
by law to build up reserves to protect
uepositors, would be omitted from
the graduated corporation taxes and
would pay fiat Is per cent on net
income.
The bill also provides for refunds
of taxes on floor stocks on hand at
the time of invalidation of the A. A
A. and on commodities, but claims
would not be allowed for amounts
under $40.