Evening star., 1939-05-29

one OF main charges against
NetD Deal is that its policies haze
frightened capital and ahenated
business. Saturday Treasury
Secretary Morgenthau presented
new tar program to Congress. 1t
1Uould increase United States
revenues BY 100000, 900 a gear,
out 1Das linked primarily to re-
coDery. Its willingness to cut
some higher individual income
surtar rates ,Das seen as an in
ducement to investors to take
normal business risks"
BY the Associated Press.
George M. Morris of the American
Bar Association asked the House
Ways and Means Committee today tl
eliminate what he termed double
taxation on the profits of business
reorganiza tions.
MI. Morris, chairman of the asso.
cations Finance Committee, testi-
fled that as a result of a recent Su-
preme Court decision the commits
sioner of internal revenue may levy
tax on the profits accruing both
to the absorbed company and to that
company's stockholders in a merger
Mr.. Morris was the first non-offi
cial witness to testify before the
Committee on Tax Revision. II
opened hearings Saturday to heal
Secretary Morgenthau indicate that
the administration, among other
things, was willing that tax "irri.
tants" be removed.
Specializing on whether levies or
both the company and the stock
holders would not diminish the num-
Der OF reorganizations and, there
fore, decrease the total Government
tax return from mergers, he said:
THE more onerous it is 10 get q
marriage license the fewer legaI
marriages you have"
Restrictions Attacked.
Mitchell B. Carroll of New York
counsel for the National Foreign
Trade Council. Inc, asked the COM
mittee to remove what he called
indirect restrictions" on corpora
tions operating in foreign trade. One
such restriction, he asserted. resulted
from the undistributed profits tax
and prevented domestic concerns
from obtaining full credits for the
taxes they must pay foreign govern
mentS.
A representative of the United
States Chamber of Commerce sale
privately that the general OBJ.
jectives outlined by Secretary Nor.
genthau were highly desirable, al
though much depended on tn,
specific provisions by which Con
gress seeks to attain them.
The Secretarys declaration tha
"a fundamental objective of soune
finance clearly is balanced budget
was we'll received in many business
quarters. as was his proposal tha
Senate and House committees han
ding taxes and appropriations op
crate jointly on a continuing basil
Ito consider the overall aspect
of the expenditure and revenue pro
grams"
Nuisance Tax Re-enactment Due.
Well-informed House member
said that in addition to re-enactin|
the so-called nuisance" taxes ex
piring June 30, the tax-revisior
program at this session probably
would cover three or four points.
These likely will include, they
said, repeal Of the undistributec
profits tax and substitution of 6
fat 18 per cent levy on corporation.
having net incomes above s25 1000 6
year; reduction of net busines.
losses from the profits of three flu.
ture years instead of the present
one-year carryover, and revaluatior
of capital stock every year insteac
Of every three years.
Secretary Morgenthau, asserting
that President Roosevelt approved
his entire statement, indicated the
administration would agree to re-
vision of the tax structure alone
the foregoing lines, but he made ne
specific recommendations as to rates
or other details.
Chairman Doughton, Democrat, o1
North Carolina indicated he thought
the question of prohibiting the issu.
ance of tax-exempt securities woulo
have to be left for next year, bu,
Secretary Morgenthau told the com
mittee that unless such exemptions
are outlawed first, it would not be
fair or logical to consider lowering
some of the higher income surtax
rates.
Gains Tax Revision Sought.
Senators George, Democrat, oi
Georgia, and Taft, Republican, o1
Ohio said they would seek revision
of the capital gains tax when the
revenue program reaches the Senate
There was considerable doubt
whether the House committee hear
ings would continue throughout
this week. because of the Memoria
Day holiday and the fact that the
committee members will be busy
Wednesday with House debate or
the Townsend old-age pension plan
The House has agreed to take up the
bill Wednesday and to vote on il
Thursday.
In addition, the administration
proposed amendments to the So.
cial Security Act will come up ir
the House Thursday. Among other
changes, the payment of old-age
insurance would start next year in
stead of in 1912 and the old-age in.
surance tax rate would be held al
It's present level for three years.
Administration leaders expressed
confidence they could defeat the
Townsend bill, calling for old-age
pensions of about $50 monthly tt
be financed by 2 per cent gross
income tax.
While the House is engrossed ir
taxation and allied problems, the