Evening star., 1936-05-17


chilly reception in the Senate and
all indications point to reviSiou
that Uiu haze to be sent back to
the House for approval.
BY the Associated Press.
The Senate Finance Committee was
informed by the Treasury yesterday
that its latest compromise revenUe
plan would produce the required $685.
100000, but halted its drive to re-
draft the House tax bill to await
more accurate calculations.
Some support originally accorded
the new plan appeared to be wavering.
In seeking to break deadlock over
how the House measure should be
overhauled. the committee late FRI
day decided tentatively on an arrange.
ment for:
Taxing corporation income at 18
per cent, undistributed corporation
earnings at per cent, placing cor
porate dividends under the normal
income tax and hiking the basic in
come tax rate from to per cent.
Several Senate committee members
who were originally agreeable to such
a revision, after studying it carefully
over night, indicated they were now
none too enthusiastic.
Some said privately that business
would like it no better and perhaps
not as well as the bill which passed
| the House.
Income Tax Unpopular.
Further complicating the situation
was the fact that proposal to boost
the rate Of every income taxpayer in
an election year was almost certain
to encounter trouble on the Senate
floor and again In conference with
the House.
Nevertheless, most committeeman
appeared to take 1t for granted that
some program would be adopted EN-.
bracing fiat tax on corporation in
come with additional surtaxes on any
earnings not converted into dividends
to stockholders
Chairman Harrison predicted to re-
porters that the bill will be out about
the middle of next week" and added
that it might be rushed to the Senate
floor before the close of the week.
The House tax bill would levy on
corporate profits at rates graduated
according to percentages of total earn.
ings withheld from distribution. Div.
idends would be placed under the nor
NAL income tax. The present corpo-
ration tax of 1915 to Is per cent would
be repealed at once and capital stock
and excess profits taxes ultimately
would be abolished.
1t developed yesterday that the SEN
ate Committee still had greatly diver
gent views as to taxing undivided
corporation proflts-the major one of
President Roosevelt's tax suggestions.
Rate Held Too High.
Some Senators objected that the
proposed Z per cent rate was too high
and should be chopped down to at
least per cent. Others favored an
even higher rate.
The Chamber of Commerce of the
United States interpreted the behind
the-scenes discussions and the variety
, of tax plans pressed before the Finance
Committee as "an apparent change OF
, front on the part of the administra-
ton" 1t said this was encouraging. v
even though the Objectionable sur
plus tax theory" had not been
! scrapped.
An avalanche of opposition" to the
House bill in the committee. the cham
ber said in a weekly Washington re-
view, "foreshadows drastic revision
perhaps complete abandonment"
THE main significance of the cur
rent developments" the business Or
ganization said, lis that they furnish
grounds for hope that the revenue
bill eventually evolved will have as it
primary objective the raising of addi-
: tional revenues instead of dubious re.
= form of the Nations economic system.
From the Treasury yesterday CANT
: a rough estimate that the compromis'
. program would yield around S625, ,000,'
S 900, which is 100000 more than tht
: (See TAXES, Page A-12)