Evening star., 1938-03-03
PROFITS TAX BAN
S GAINING FAVOR
BIoc's Power Is Uncertain
as Members Plan for
12.Hour Debate.
~ the Associated Press.

~ the Associated Press.
Demands for outright repeal-in-
stead Of modification-of the undis-
tributed profits and corporate gains
levies spread IN the House today after
leaders decided not to impose gag
on tax-revision debate.
The strength of the repeal bloc,
including many Republicans and some
Democrats, was uncertain, although
administration lieutenants expressed
confidence they could defeat the pro-
posal on roll call vote.
Had gag" rule been adopted it
would have prevented consideration
Of repeal or other amendments.
Many members said frankly they
had not studied the complicated leg
islation in detail and we're waiting for
the IL hours of debate, beginning
shortly after noon (E. S. t., before
making up their minds.
Chief Points of Dispute.
The chief points of dispute we're
provisions which would:
l. Remodel the entire corporate
tax structure by extensive modifica-
tion of the undistributed profits tax
and the imposition of new surtax on
large companies owned by family
OF q few individuals.
2. Revamp the capital gains tax to
provide maximum rates of Is to 1872
per cent on long-term gains and the
offsetting of gains with losses.
From Democratic members of the
Ways and Means Committee the
House had written assurance that
these changes, coupled with minor
adjustments in other levies, would set
up "well-balanced tax system. i'm
proved with respect to certainty and
equity" that should produce "a very
substantial stimulation to business"
Assailed by Republicans.
From Republican committeeman 1t
had an emphatic declaration that the
bill would not reduce the tax bur-
den on corporations of any size and
would continue to injure business by
retaining the vicious and indefensible
principle" Of the undistributed profits
tax
House leaders said they expected
the conflict to touch off some of the
iiveliest oratorical outbursts of the
session.
The bill, fifth administration reve-
hue measure in as many years, has
been in the committee for four
months.
In some respects. it is merely an
epilogue for the 1887 act The latter
was enacted to plug some of the
biggest loopholes through which the
administration said millions of DOL
lars due the Treasury we're seeping
away.
1t was on the basis of Treasury
recommendations that the new bill
was drafted. The stock market slump
last fall and the present business re-
cession had served to increase de-
mands from business men that Con-
gress provide some relief
Only Solution Offered.
Revision of the tax laws was said
BY Senator Byrnes, Democrat, of South
Carolina, 10 have been the only solu-
tiar 70 the recession offered at hear
tnss before the Senate Unemploy-
nent Committee, which he heads.
Another major administration pro-
posal-creation of wage-hour stand
ards-stlll was being considered by a
House labor subcommittee. Chair
man Norton. Democrat, of New Jer-
sey. declared the whole committee
would approve bill by April l.
The Senate, continuing debate on
the Government reorganization bill,
heard Senator Walsh, Democrat, of
Massa achusetts, criticize a provision
to substitute one administrator for
the three-man Civil Service Commits
sion. The change might destroy pub
lie confidence in civil service, he said.
The House passed a bill appropri-
ating $125,086, 900 for the Interior
Department in the 1s3s-39 fiscal wear.