Evening star., 1938-03-18
BY JOHN c. HENRY.

Enactment within 30 DAYS of new
tax law which will be of very ma
terial benefit to business" was pre-
dicted today by Senate Majority
Leader Barkley.
The Kentuckian made the forecast
In the Senate as hearings before that
body's Finance Committee were made
the sounding board for severe criti-
cism ofNew Deal tax policies by rep
resentatives of various business inter-
ests.
Pleading for revision of current
tax regulations. the witnesses blamed
the law for the sudden drying up of
business last fall and held out an
implied promise that enactment of
the desired notifications would bring
speedy improvement in economic con-
ditions.
Senator Barkley's forecast was
made in commenting on a statement
by Senator Copeland. Democrat. of
New York, that business required
some assurance that it will not be
burdened. imposed upon and unduly
restricted by Government, and that
taxes be adjusted
If this could be done" the New
York Senator declared. Il believe We
would be on our way to prosperity
again"
Substantial Moderation Seen.
Senator Barkley responded that he
looked forward confidently Ito very
substantial moderation of tax laws.
which would go long way" toward
restoring business confidence. He
added that he believed the Finance
Committee would be able to complete
Its hearings and wind up it's work
on the tax measure within a week,
and that the Senate would take it up
Immediately.
Senator Borah. Republican. of Idaho
joined in the debate to oppose what
ne said appeared to be a trend in
the Finance Committee toward low
erine exemptions and broadening the
tax base
What they are proposing to do"
Senator Borah declared. is to place
more and more of the burden of
government on the low income classes.
They are proposing to repeal the taxes
which are said to be a burden on
business and place them on those less
able to pay"
Most biting attack on the adminis-
tratlon, made before the Finance Com
mlttee today, was that of NJ L. Seid-
man OF the New York Board of Trade.
who warned that America is menaced
only nv
destructive economic influences at
home-inf1uences that sap our national
strength and vitality"
He added that we are laboring
under the most costly Federal bu-
reaucracy in our history. under the
greatest peacetime budget in our his
tory. under the largest national debt
in our history and under the most
burdensome taxes We have ever
known"
Says Depression Is Managed.
I'm the opinion of many people" he
continued, we are not in a business
recession. We are in a depression, a
synthetic depression. a managed econ
omy depression, a depression that is
estimated to have cost us some s7O.-
100000 in the period of a single
year. Many of our troubles can be
traced directly to faulty and oppres-
awe taxes. Taxation is undoubtedly
the most decisive def1ationary inf1u-
ence in our capital economy today"
Mixed qualification and complaint
was presented by William j. Kelly.
president OF the Machinery Institute.
The trouble has BEEN" Mr., Kelly
said that while our tax policies of
recent years have been aimed to pun
ish the so-called rich. they have
missed the target. FOR enhancing
theory often looks good until it meets
up with hard-sheled practicality.
The result has been that the bar
rage has hurt the innocent bvstander-
the unemployed-more than any one
else
The determining factor in condi-
mons today is the attitude in Washing
ton toward business. The handling
OF the tax bill will be viewed by the
country as an indication of encourage
ment or disbursement"
With virtual unanimity. the wit
nesses demanded full repeal of the un. |
distributed corporate profits tax and
treatment OF capital gains as separate. |
rather than ordinary, income. AS
principal substitute to make up rev.
enue which might thus be lost, many
of the witnesses proposed a broader
Income tax base
AS longtime solution. the Ameri-
can Institute of Accountants proposed
creation of qualified. non-partisan
commission to establish fixed prin-
c1ples in come taxation and related
administrative procedure.
Joseph P. Tumulty, secretary to
FORMER President Wilson. made a
dramatic appeal to the committee
10 eliminate the House approved tax
on sales Of commodity future: a lew
assessed against pit traders without
regard to net income and frequently
exceeding such income.
variation in criticism was offered
by Prof. Yandell Henderson of Yale
University, who turned his fire On
the QaYQr industry rather than the
n 81 to So s. per esDss ssllon' On. ine ne
ID s2.25 figure set in the
Hs Henderson scofted at the
booth menace as "a bogeyman
to scare congress. There. is ample
profiteerthg in the liquor industry to
enable them to pay this tax
In addition to its proposal for
new determination of fixed principles
Of Federal income taxation, the In
stitute of Accountants suggested the
following:
Outright repeal of the tax on un-
distributed corporate profits
Further modification of the capi-
tai gains section.
mo restoration of the third basket
provisions, advocated by the Ways and
Means Committee of the House.
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