Evening star., 1936-06-02
Will Support Compromise
Over House Bill, Then
Spurn 1t.
INSUFFICIENT TIME
FOR DEBATE CLAIMED
Finance Committee Sets Yield at
$4,000, 900, Saying Treasury
Estimate Is Low.
BY the Associated Press.


today by Senate Republicans attending
a party conference on revenue legisla-
ton.
Senators attending the meeting said
their strategy probably would be to
support the Finance Committee COM
promise tax plan in preference to the
House bill or any other proposal and
then vote against it ultimately.
They said their opposition to final
approval, even of the compromise was
based on belief that tax bill is un-
necessary especially if a greater effort
were made to curtail Government ex-
penditures. They also expressed a
conviction that insufficient time had
been allowed to work out details of
sound measure.
No Vote Taken, McNary Says.
Minority Leader McNary of oregon
said there was full representation at
the gathering and that Republicans
discussed many provisions Of the bill.
such as the surtaX on undistriDuted
corporation profits.
There were no votes" McNary said,
"and no decisions were made"
Earlier the Finance Committee, in
majority report, estimated its COM
promise measure would produce $685.
100000 of permanent and temporary
revenue in a year.
A finance subcommittee was meeting.
meanwhile, to discuss possibility of
adding to the tax bill a provision for
continuing the sugar quota law, amend
= f,, N1a
preme Court objections.
Senator CouZenS. Republican, Of
Michigan. subcommittee member. pre-
dicted however that there would be
no processing tax on sugar.
Favored Over House Bill.
McNary said the Republicans showed
an almost unanimous feeling that the
bill as reported by the majority Of the
Finance Committee Is much favored
over the House bill and the bill to be
reported by minority members of the
committee"
He said it was clearly understood
| there would not be "a knock-down dis
cussion" of the bill during debate on
the floor and the Republicans would
seek not to delay the measure, Nc
/ Nary said all minority members want
to get away Saturday or Monday" add
ing. land l believe We can"
I The Finance Committee majority
report boosted Treasury estimates OF
the bills revenue yield. terming them
excessively conservative"
This is 5000 OOO more than the
J tl,o
report said. "and will amply take care
of the permanent revenue of S620.-
600, 900 requested by the President and
the temporary revenue for the next
fiscal year"
President Roosevelt asked for S5l7,-
| 100000 of temporary funds to be
raised over two or three years.
Hastings Hits Bill.
Preceding the filing of majority
views on the tax measure two minority
reports had aSsailed the bill. In one
Senator Hastings, Republican. of Del
aware accused the Government of "ex-
! travagance" and said:
II am opposed to any increase in
| taxes until there be shown some af-
firmative evidence upon the part OF
the President and the majority of Con-
gress Of real appreciation of their re-
spective responsibilities to the tax
payers of this and future generations"
Black Joins Critics.
Senators Black. Democrat, OF Ala
bama and La Toilette, Progressive, of
Wisconsin issued another minority re-
port criticizing the measure as one
which would deal a wholly unneces-
sary and deadly blow" at small cor
porations and small stockholders.
They produced a substitute more
nearly approaching administration
suggestions for steep, graduated taxes
on undistributed income OF corpora
tions.
The majority report, vigorously as
sailing the bill as passed by the House,
said the Finance Committee plan
would produce more stable revenue.
House Proposal Hit.
Striking at plan to base corporate
taxation on rates graduated according
to undistributed income, as proposed
in the House bill, the committee re-
port said it had six fundamental de-
| fects:
The plan proposes an entirely un-
tried system uncertain as to revenue.
1t will penalize many corporations
not used for the avoidance Of income
surtaxes to reach a few that are
utilized for that purpose.
1t will prevent growth of new cor
porations by preventing accumulation
of reasonable reserves.
It may retard business expansion
and reabsorption of the unemployed.
1t penalties small corporations and
those with insufficient reserves and
gives advantage 70 the large firms and
those with excessive surplus.
1t tends to transfer corporate con-
troll to the Government.
"The committee takes the view"
the report said, that the evil sought
to be remedied with the retention Of
profits by corporations to protect in
vestors having large incomes against
paying on larger incomes, may be
soundly corrected without doing the
injustices above described, and that
this can be done by retaining the
general corporate income tax with
7 per cent tax on retained income,
supplemented by strengthening OF
section 102 of the present law which
deals with corporations improperly
accommodating profits"
The report, accepting some Treas
ury estimates, set forth $75l,000, 900
as the yield from corporations and
their shareholders, taxes on imported
(see TAXES, Page A-5)