The Waterbury Democrat., 1937-11-15

Roosevelt.
 Taxes, Federal spending ano the Administrations inability tc keen government costs within in- come are big issues in this specia session. They will be projected into the regular session meeting next January and beyond into the Congressional elections next Mo- Vember.
 MT. Roosevelt reported last month that the deficit this fisca year would be $695, 100000, He said the Treasury had over-esti' mated fiscal year tax revenue by e643, 100000 when first figures were made public last January The national debt has passed $37,- O0O,000,000. Business is in a tai spin which could be a passing phase of recovery or the beginning of a loop the loop depression Congressmen returning to Wash ington are confronted by problems as serious as any since the special session of 1883 in which MT Roosevelt launched his first New Deal.
 MT. Roosevelt summoned Con- gress this year to deal with five point program which even thc most sanguine do not expect to see disposed of for many months. The President said he wanted crop surplus control, legislation for proper land use, a wage and hours bin. reorganization of the eXecu- tive departments and amendments to strengthen the antitrust laws.
 Aimed To Benefit One Third
 That program is part of MT. Roosevelts plan to improve what he terms the one-third of the na- tior's population i'll housed, ill., clothed and ill-fed. Business recess sion, falling tax receipts and a more independent attitude on Capitol Hill may divert oratory in the next few weeks from MT Roosevelts one third to other groups which clamor for relief frosn New Deal legislation deemed to be oppressive.
 Business is leading the campaign for amendment or repeal of a variety of New Deal measures. The principal objectives are change in taxation imposed upon reserve funds of corporations and upon so called capital gains, such as ppofit in a stock market transac- ton or in the sale of real property
 The tax on corporate reserves is graduated from to 27 per cent It was designed to compel cor porations to distribute profits in the form of dividends, which would be, taxable as received by individ- uals as income instead of piling up large sums in corporate treas uries where they would be exempt from taxation.
 1t is charged that the tax has imposed undue hardship on cor porations whose reserves were de- pleted when the tax law was enacted, upon debt ridden cor porations and, especially, upor corporations which are In some- what precarious financial condi' ton and which are forbidden by state law, under such circum. stances, to disburse their earnings On more general grounds 1t k argued that tax compulsion tt force distribution of annual earn ings at the expense of reserves will prevent all corporations iron accommodating the large reserves necessary to cope with cyclica conditions of business depression
 Capital Gains Tax Attacked
 The capital gains tax and tho complimentary capital loss provi' sion of the revenue act likewise | under fire. It has been in effec in one form or another for year! but was amended under the Nev Deal. Of 1t, Editorial Research Reports said:
 "One of the chief criticisms d. rected at the present method O treating capital gains and losse has concerned the limitations O allowances for losses to the amour of gains realized in the same year plus $2000. It has been pointed out that this provision means. il effect, that while net gains ar' taxable. net losses beyond $2,O0' are not deductible."
 A capital gains tax was imposed in 1913, taxing such gains on tho same basis and at the same rate! as other income. The 1913 ac did not allow taxpayers to deduc capital losses from their taxablb' income The 1916 and 1917 rev enue acts permitted deduction O capital losses up to the sum of any capital gains in the corresponding tax-paying period.
 winthrop W. Aldrich of tho Chase National Bank and other' have contended that the heavy taxation imposed on capital gain' combined with the limitation or deductions of capital losses iron taxable income have been factors in creating an unhealthy stock market situation. It is argued that the capital gains tax dissuade; investors from taking profits wher they are available and that stock prices, therefore, are pyramidec to peaks from which they collapse suddenly as in the sharp recession of recent weeks.
 SEC Also Target
 Combined with attacks on the tax structure are complaints that Security and Exchange Art restric- tions hamper the stock market and -