Evening star. [volume] (Washington, D.C.) 1854-1972, 1937-11-12
Reduction of Levy on About
IS Per Cent of Businesses
Discussed.
VINS0N POINTS OUT
NEED FOR PROGRAM
Disparity of Large and Corpora
tons Burdens Cited by Head
of Group.
BIZ the Associated Press.

A House tax subcommittee talked
today of aiding little business men by
reducing the tax burden on perhaps
85 per cent of the Nations small firms.
Chairman Vinson said some system
might be worked out for graduating
taxes on the small firms on a lowered
level
No decisions were made on how this
might be done, he said, but I'VE are
hoping to lessen their burden" He
added: They have more need of
retaining their net income. relatively,
to build up their businesses"
He said there was quite some dis
parity" between the relative tax bur-
dens of the small and large corpora
lions. This disparity. he said, the
subcommittee may attempt to remove
in part.
In 1885, he, said IS per cent of the
corporations had net income of less
than $4,000. There is no question
that these fall in the category of small
concerns. he said, but the committee
probably will draw the line between
small and big firms at somewhere
above $4,000 net income.
Net Incomes Under $4,000.
More than SO per cent of corpora
tons filing tax returns had net in
comes of less than $4,000 in 1885, he
said.
OF the more than 100000 corpora
tons in the United States, the chair
man asserted, about 100000 have net
incomes.
Mr.. Vinson said the subcommittee
also took up again today the question
of relief from the undistributed profits
tax for debt-ridden corporations, those
which have accumulated a deficit at
the start of taxable year and those
coming out of bankruptcy or reorgani-
cation.
Meanwhile. statements from Demo-
cratic and Republican Senators gave
new impetus to a growing campaign
to reduce business taxes.
Harrison Urges Modification.
From Chairman Harrison. Democrat.
Of Mississippi, of the Senate Finance
Committee came the unqualified asser-
ton that there must be some mod
ification of the undistributed profits
tax"
Senator Harrison. telegraphing this
statement to Secretary of the Treas
ury Morgenthau from his home late
yesterday. added that the administra-
ton should endeavor "to> restore con-
f1dence to business"
Other legislators spoke in the same
vein. praising Mr.. Morgenthau's stand
for balancing the budget through re-
trenchment, but private comments of
some Congressman indicated they
were not enthusiastic about trimming
expenditures few months before they
are up for reelection.
Mr.. Morgenthau had said in
speech Wednesday that some of the
taxes which have inspired objections
from business and the public might
be ended if expenses were cut.
Vandenberg Hits Profits Tax.
Senator Vandenberg, Republican, of
Michigan, like Senator Harrison,
struck at the profits tax.
Under this levy" he said, "a COM
pany can't accumulate nickel to be
used for new employment, plant ex-
pansion and reserves.
I'VE have all the raw materials for
an unprecedented prosperity and If
the Government would give business
half chance we could attain it."
The recurrent question of tax
exempt securities came before House
tax subcommittee.
Senator King, Democrat, of Utah
expressed concern that Morgenthaus
economy proposals might not sue
coed.
''As long as there are public de-
mands for Federal funds" Senator
King said, Congress undoubtedly will
continue to vote them, because public
| appropriations are the most powerful
vote-getting instrument Congress-
man has"
Mr.. Morgenthau had suggested that
| 1889 expenditures could be brought
into line with revenue by 100000
900 cut in appropriations for roads,
public works, relief and agriculture.
No Comment From Agencies.
There was no comment from most
agencies handling these funds, but off,
Gals of the Bureau of Roads said
definite commitments would prevent
as large cut in road expenditures as
Mr. Morgenthau proposed, unless Con-
gress took action at the special session
beginning next week.
The Treasury Secretary had sug-
gested there might be a return to the
pre-depression figure of $100,000,000 a
year in road spending. He estimated
this years figure would be S253, 600, 600.
OF S900.000,000 in agriculture ex-
penditures which Mr.. Morgenthau said
might be reduced, about S700,000,000
is for regular department functions
and the Soil Conservation Service.
The latter's cost is expected to ap-
proach $50,000,000 this year, and de-
partment economists have estimated
that the new farm program, which will
embrace it, will cost S700,e00,000 or
more.
Mr.. Morgenthau gave $535, o00, 900
as the prospective total this year for
| public works-items for which Con-
gressmen receive especial pressure
from their home districts. Appropri-
ations and ALLEGATIONS already made
for 1889 total more than 100000 900.