Evening star., 1938-04-23

because II he insisted on his way and
did exercise his veto power on bill
unsatisfactory to him it would have
taken two-thirds to override his veto.
1t is not certain that there would have
been two-thirds in both houses to over
ride his veto on the undistributed
surplus tax. A majority was ready
to vote against him on the issue but
not anywhere near tWo-thirds
The Senate conferees did succeed in
getting some important notifications
of the House bill which had retained
the undistributed profits tax. Thus
deficits may be carried over so as to
exempt business from penalty and
so also may credit be obtained for
payments on debt. But in any event,
irrespective of these two items, min
imum tax of 1872 per cent must al
ways be paid on all earnings of corpo-
rattons.
Retention of Principle.
This. for some businesses. will be
better than the 1s per cent fiat tax in
the Senate bill What is most vicious,
on the other hand, is the retention
of the principle of the undistributed
surplus tax, because a business cannot
tell until the very end of the year
just what its taxes will be, for it is
impossible to tell till the year end
what the position of company is to
be with respect to the amount that
safely can be disbursed for dividends.
However the range of uncertainty has
been greatly reduced by the new pro-
posal of the Conference Committee.
The Senate conferees did win an i'm
portant concession when they succeed
ed in limiting the new undistributed
tax provision to two years. This means
that the provision automatically ends
two years hence and it will take
81 per cent vote of both houses to
get it re-enacted, which is far differ
ent position than the Senate conferees
found themselves in earlier this week
with respect to change in the present
law. They faced the fact that it would
require presidential approval or else
q tWo-thirds vote over his veto to eX-
tricate the penalty -on-thrift tax alto
gether from our revenue collections.
The ending of the deadlock is
healthful sign. 1t means that busi-
ness can now plan, at least in so far
as the capital gains tax is concerned.
For this has been regarded as one Of
the stumbling blocks to the flow of
capital in natural channels The capi-
tai gains tax, it should be stated in
all fairness, was passed before the
present administration came into
power, but its repeal has been con-
sistently opposed until now.
Acceptance Is Seen.
1t would seem probable that both
houses now will accept the Conference
Committee report as the best obtain
able under the conditions that have
existed. When the Conference Com
mittee's report has been adopted Rep
resentative Fred Vinson, member of
the House Ways and Means Commit
tee, will be free to take his seat on
the Circuit Court of Appeals of the
District of Columbia, to which he was
nominated by President Roosevelt and
confirmed last December.
Friends of Mr.. Vinson insist that
he was persuaded to stay on as men,
Der Of the House and to delay taking
the oath as justice because of his
valuable experience and not because
OF any collusion with the President,
whose position on the tax bill he has
so steadfastly upheld. Chairman
Doughton of the Ways and Means
Committee frankly says he urged Mr..
Vinson to stay and help him steer the
tax bill through Congress.
Mr.. Vinson may max a good judge
and fair one, but the incident ought
not to pass without public notice of
the fact that the President does not
hesitate to award life jobs in sitting
members of Congress, even while the
two houses are in session acting on
legislation in whose passage he has
political interest.
Copyright. 1889