Evening star., 1936-03-11
|GAG RULE DECREED
ION TREASURY DATA
FOR TAX PROGRAM.
Corporate Earnings Rate
Due to Be Adjusted to
Meet "Loss."
PROGRESS is REPORTED
AFTER HOUSE SESSION
Committee Beginning to See
Light" Members Say, but With.
hold News of Plans.
BY the Associated Press.

By the Associated Press.
A House Ways and Means Subcom-
mittee today clamped gag" on any
further disclosures OF Treasury data
submitted as basis for working out
President Roosevelt's S792, ,000, 900 tax
program.
Co-incidentally, there were intima-
tions that the subcommittee was ap-
preaching an understanding that tax
rates on undistributed corporate earn
ings will be adjusted so as to meet any
loss Of revenue caused by providing a
cushion" reserve for corporations and
by exempting banks, insurance COM
panies and fiduciary organizations
from the projected corporate levy.
Some committee members intimated
higher rates in higher brackets than
those originally advanced by the
Treasury may be resorted to If needed
to assure the yield of $500, ,000, 900 Of
additional income which the admin
istration is seeking from the corporate
tax.
Gag" Is Disclosed.
Emerging from subcommittee ses-
sion, Representative Vinson, Democrat,
Of Kentucky. asserted:
Il can't talk because of a gag"
Chairman Samuel B. Hill said other
members Of the subcommittee had op-
posed his previous procedure of giving
out information as it was received by
the subcommittee so Il can't say any
thing"
Vinson did add, however, that the
members ARE making progress" and
he is beginning to see the light"
It was learned privately that new
tax tables we're handed over today by
Treasury experts in which the highest
rate submitted was below the rs per
cent maximum suggested by the
Treasury yesterday in the event the
subcommittee should insist on pro-
viding corporations with a reserve, ex-
empt from taxes or taxed at a low
rate, on which to lean during rainy
days"
Rates Held Impractical.
The rs per cent rates were described
by one committeeman as entirely i'm
practical because mot q dime" would
be collected under them
Rather than pay such rates to be
permitted to put large share Of un-
divided income into reserves, it was
asserted, corporations would distribute
such net income among stockholders.
who would pay income taxes upon the
dividends.
Hill did say for publication that yes
terday's drastic tables we're based on
assumptions" since they
were drawn up on basis of either
100 per cent distribution or 100 per
cent retention of net corporate in
come. No corporation is going to con-
duct operations along such lines, he
said.
Definite Figures Withheld.
The subcommittee still refrained
from issuing on any definite figures on
how much the projected $500 900 ,oC0
yield from corporate taxes would be
provided rates were not in
creased, in order to allow the accumu-
lation Of depr.zsion reserves. One
member said, however, that exemp-
ton of banks, insurance companies and
similar institutions, which are re-
quired by law to carry reserves and
surpluses, might not reduce the de-
sired yield by 350.000,000.
Senator La Toilette, Progressive, Of
Wisconsin, expressed sympathy with
the Presidents plan for taxing the
profits of corporations,
but said he would attempt to broaden
the program by raising income tax
rates, in addition. II
At the same time, Senator Glass,
Democrat, Of Virginia, told reporters
I'VE ought to levy taxes for every dollar
we expend." The Virginian did not
comment on the Presidents proposal
for revolutionidng the corporation tax
system.
It was at the House Tax Commit
tees request that administration ex-
perts submitted complicated schedules
designed to lower the proposed taxes
on moderate corporation savings, but