Evening star., 1936-06-07
The Tax Bill.

The Senate's rapid passage of the tax
bill, which moved Senator Vandenberg
to inquire, in mock seriousness, rs this
the greatest deliberative body in the
world?" has produced a curious and
unusual situation in regard to the i'm
portant issue of taxing undiStributed cor
poration profts-the nub of the Presi-
dents proposals regarding new taxation
and the main point of disagreement
between House and Senate. Had the
Senate voted on the La Toilette and
Black amendment to the tax bill late
Friday, that amendment, representing a
compromise between the House bill and
the Senate Finance Committee bill, but
following the principle of the House bill,
would surely have gone down to defeat.
Had it been voted down, the Senate
conferees would doubtless have found
themselves bound against yielding to the
House. Senator Barkley suggested as
much. With the amendment withdrawn,
however, it now offers the meeting
ground between the House bill, which
taxes undistributed corporation earnings
as high as forty per cent and the Senate
bill, imposing a fiat tax OF seven per
cent. Senator Robinson's suggestion that
the authors of the amendment withdraw
1t, in order that the conferees might feel
free to consider it, was accepted by Sem
ators La Toilette and Black. They would
have hesitated to do so had there been
much doubt that the amendment now
has fairly good chance of success.
Thus the tax bill, taken up toward the
close of the session'in political cam
paign year and rushed to passage by the
House, has been rewritten by the Senate,
rushed to passage there and now awaits
a possibly third writing at the hands
of the conferees. That may be the best
way of getting rid of the tax bill in time
for early adjournment But it is not
writing a tax bill as it should be written.
It is dangerous, haphazard method.
Senator La Toilette and Senator Black
made an effective argument in behalf
of their amendment. They may have
persuaded many Senators, though not
enough of them, that the amendment
represented desirable and even neces-
sary reform But it would not yield the
revenue to be yielded by the Senate bill.
And the Senators, if convinced that there
is a field of tax evasion or tax avoidance
represented in the accumulation by large
corporations of undistributed earnings,
we're not convinced that these earnings
could be arbitrarily taxed into dividend
distribution without making the proposed
cure for the abuse more harmful than
the abuse itself.
The La Follette-Black amendment,
however, is now placed in strategicaly
advantageous position. The House con-
ferees will not be inclined to repudiate
the Presidents tax proposals to the
extent of yielding to the Senate. The
Senate conferees, on the other hand,
have been offered by La Toilette and
Black a compromise that does not go as
far as the House, yields almost as much
revenue as the Senate bill, actually
taxes many corporations less than the
Senate bill and at the same time moves
in the direction of the Presidents ideas
of reform. Rather than face continued
delay, the Senate conferees may accept
what the Senate itself would have voted
down, and the Senate will approve their
action.
The propelling sentiment, however,
will be the desire to adjourn. Consid-
Grafton of a tax bill should be free from
considerations other than the levying of
fair tax that will yield needed revenue.
When such consideration becomes in
volved with politics, theories of reform
and haste for adjournment there is
little public confidence in the measure
finally written into law.