Evening star., 1936-05-26

bill precipttGted long fight oDer
the presidential proposal to shift
corporate taxation from a lepy on
income to Levy on Surpluses The
relief bill fight concerned the
handler OF the purse-Hdrry Hop
kins or Harold Tckes.
BY the Associated Press.
AS Democratic members arranged to
consult with President oRosevelt to-
night on the tax bill, the Senate
! Finance Committee today agreed def
nitely to tighten provisions on exist
/ ing law for penalty taxes on corpora
tons Improperly accumulating sur.
/ pluses"
The committee decided that every
corporation which retains more than
$4,000 of its income or more than
40 per cent of income, whichever Is
greater, shall be required to file a
/ statement wit its tax return setting
/ for the reason for accumulating the
/ funds.
/ 1t agreed. too. to extend from three
to four years the statute of limita-
tions applicable to collection of high
taxes on corporations which build up
surpluses improperly for purposes OF
allowing stockholders to avoid sur
taxes in the upper income brackets.
+ Acting Chairman King said the
changes were more psychology than
( realism" and that their effect would
be to make large corporations a little
more careful in Withholding" and to
/ induce them to make bigger distribu.
tions of their earnings.
viii Confer With President.
Earlier, the White House had an
nounced that Democratic committee
men would confer with the President
on the request of Chairman Harrison.
who absented himself from the COM
mittee session today because of Ill.
/ ness.
/ Final approval of the tax bill was
/ regarded as certain to be held over
at least until tomorrow.
The committee expected to vote
during the afternoon on whether TO
impose an excise tax of p cent
/ pound on sugar and on a proposal
! for additional excises, some as high
! as AZ per cent, on imported vegetable
| oils.
A subcommittee. headed by King.
decided after hearing a barrage OF
opposition from beet sugar interests,
to recommend that the sugar tax be
rejected.
King said the committee during the
afternoon was going to clean up
everything we possibly can"
Not Advised of Farley.
Asked when the bill would be re.
ported out, he remarked; I'm no
prophet"
He said he had not been advised Of
the White House conference tonight
and did not know its purpose.
New definitions we're to be placed
in the existing law providing for the
taxes on corporations which improp-
erly pile up surpluses, but these were
not fully worked out.
The law now applies to such corpo-
rations Is per cent tax on income
up to 100000 and 35 per cent on
income in excess of that amount. The
rates were not changed.
Under the amendment to the law
approved today any corporation could
retain $4,000 of its income and not
file the statement as to the purpose
to which it would be devoted. And q
corporation could retain more than
$4,000 and not file a statement If
the amount did not exceed 40 per
cent of its income.
The Finance Committee has been
unable so far to reach an agreement
on the revenue bill, although it has
departed far from Mr.. RooSevelt's sug-
gestions for a new corporate tax sys-
tenn based on undistributed profits.
Both the revenue measure passed
by the House and the plan so far
nodded by the finance group fall
short of the Presidents request for
$500, ,OO0, 900 of permanent and s517.-
100000 of temporary revenue.
Sugar Tax Rejected.
Just before the White House con-
ferees were summoned. a Finance
Subcommittee agreed unanimously to-
day to recommend against including
the proposed tax on sugar.
Subcommittee members said too
many complicating factors were in
volved to permit carrying the excise
levy in the revenue bill, even though
it would raise around s66,000.000 and
lift the total estimated yield of the
measure to about the $500 ,000, 900 of
permanent funds requested by Presi-
dent Roosevelt.
Representative Cummings, Demo-
crat, of Colorado testified that the
sugar levy would place q $l5,84O 900
burden on farmers.
He urged that no action be taken
on the sugar tax unless it were at
tached to new bill to re-establish
the sugar quota system.
Vandenberg Voices Opposition.
Senator Vandenberg, Republican, Of
Michigan said it would be unfair to
pick out sugar as the only commodity
to be penalized under this (taxJ bill"
Clarence ]. Bourg. representing the
Farmers and Manufacturers Beet SUI
gar Association, with members in
Michigan. Ohio, Wisconsin and In
diana, also protested against Singing
out sugar"
Leaders were concerned over the
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