Evening star., 1936-05-07
TAXB|LL IS CALLED
FIAT RULE SCHEME
Manufacturers Say Plan Is
Far More Than One to
Raise Revenue.
BACKGROUND

BACh GROUND-
Senate Finance Committee is
considering tar legislation tChich
Uould reuse entire structure OF
corporate taration As requested
By President Roosevelt and passed
by House, pending measure Mould
direct heavy tar against undistrib-
uted corporation profits ,Dith nodi-
fcdtionS OF other corporation
tdreS noD in effect.
Business has opposed principal
OF neW tar as dangerous to policy
OF maintaining reserves for years
OF depression.
BY the Associated Press.
The administration tax bill was
attacked by the National Association
of Manufacturers today as "a form of
deliberate national economic planning
and a further step toward Govern
ment regulation and RECOMMENDATION Of
business"
The associations view was ex-
pressed to the Senate Finance Com
mittee by Noel Sargent, its economist
and secretary.
Contending the proposal for taxing
undistributed corporate profits also
would intensity booms and depres-
sions and promote monopoly. Sargent
proposed instead the creation of a
special committee representing Gov
ernment and industry to submit
recommendations for revenue legisla-
ton at the next session of Congress.
Hearings to End Tomorrow.
The manufacturers association lev
eled it's heaviest fire at the tax bill!
as the Finance Committee was rush.
ing toward the close of hearings.
Chairman Harrison has set the wind
up for tomorrow.
Earlier today spokesmen for Cana
dian investors, American tanners and
others had opposed various provisions
in the bill.
Sargent was accompanied before
the committee by James A. Emory,
general counsel of the Manufactur-
ers' Association, who said the tax bill
would complicate the tax structure,
enhance inequalities and provide an
uncertain source of revenue.
Both spokesmen for the association
cited taxes going into effect next year
under the social security act. Emory
contended that if it was good policy
for the Government to compel re-
serves for unemployment, it was
equally sound to encourage business
voluntarily to build up similar re-
serves.
Sargent said the bill could not be
considered merely as tax proposal.
1T must also be considered as q
regulatory measure and as form ot
deliberate national' economic plan
ning," he testified. ut is further
step toward Government regulation
and regimentation of business.
Corporations are groups of indi-
vidualS who have invested their saw
ingS in joint business enterprise. II
the minds of many who advocate such
tax as this is the idea of finding 6
means for Federal control of all in.
dustry through substituting Govern.
ment discretion for that of manage
merit as to the amount of earning.
| which should be retained in business.
Sargent listed nine specific objec.
tions to the bill, including argument.
that it would prevent industrial
growth, result in receiverships, burder
recovery of the durable goods industry
and reduce purchasing power.
TugwelPs Aims Cited.
Asserting that Rexford G. Tugwell
reSettlement administrator, recently
had advocated control of industrial
expansion through taxing undistrib.
uted profits, Sargent said:
I'VE are opposed to such economic
planning by decree or legislative fiat
A tax system which penalties the set.
ting aside of any substantial part o1
corporation net income for industrial
reinvestment is economic folly"
The manufacturers economist alsc
urged repeal of the present capita
gains and losses provisions of the law
and recommended that corporation in.
come taxes be based on average profit!
and losses over three years.
Emory said the tax proposal was no
sound as q source of revenue becaus,
| (See TAXES, Page AID