Evening star., 1939-05-28


structure, particularly repeal of
the undistributed profits levy.
Amid conflicting statements, the.
administration has stood pat on
the contention that Whdteuer is
done must not act to reduce
reDenueS.
Bv the Associated Press.
A broad outline for tax revision
legislation to remove business irri-
tants" and promote a lasting re-
covery" was laid before Congress
yesterday by Secretary of the Treas
ury Morgenthau.
Without making specific recon.
mendations for new tax schedules,
the Treasury chief suggested to the
House Ways and Means Committee
that it consider a five-point pro-
gram, and indicated the admins
tration was willing to:
-l-Reduce some of the higher in
dividual income surtax rates If
pending legislation is passed to pro-
hibit future issuance Of tax-exempt
securities.
2Repeal the remaining 21a per
cent undistributed profits tax.
Siderable the present capital
stock tax and the related excess
profits levy.
4Provide for the carry-over Of
net annual business losses to be de-
Quoted from business profits Of
future years.
5-Continue cooperative studies,
with view to legislation at the
next session, to change the present
law limiting to $4,000 the excess
of corporate capital losses over capi-
tai gains that may be deducted
from ordinary income.
Republicans Claim Admissions"
Republicans on the committee
promptly asserted that Secretary
Morgenthau had admitted" the
Republican position on the tax
question was correct. In a state
ment which he said spoke for the
10 minority members of the COM
mittee, Representative Treadway Of
Massachusetts, said: by continue
ally pointing out to the country
the dangers of the administration s
tax policies, we have finally forced
this admission and an agreement
to remedy the situation partially
. 81
He continued that the Republi-
cans on the committee wanted to
overhaul the entire tax structure, !,
and added.
whether or not relief for busi-
ness from these expressions and
dangers has been too long delayed
for quick recuperation remains
to be seen. 1t is encouraging, how
ever, that the administration even
thus tardily has seen, in part al
least, the error of its ways and is
moving to follow the advice of the
Republicans"
Secretary Morgenthau told the
committee President Roosevelt ap-
proved of his entire statement. In
addition to outlining a basis fol
changes in the Federal tax struc.
ture. the Secretary also proposed
creation of small temporary ma
tional commission to study "over-
tapping and competing taxes" oil
Federal, State and municipal gov
ernments and proposed a solution
without delay.
Suggests Policy Committee.
He also suggested that Congress
set up a joint committee on fiscal
policy comprised of the House Ways
and Means and Appropriations
Committees and the Senate Finance
and Appropriations Committees to
consider simultaneously each year
what the Nation needs" and what
the Nation can afford"
Mr.. Morgenthau was the only
witness at yesterdays session OF
the committee, which adjourned
until tomorrow after a two-and-a-
half-hour meeting.
Questioned after reading his
2,700-word prepared statement, the
Treasury head explained he was
merely laying the broad basis fol
tax revision minus specific pro-
posals for changes because it was
the committees responsibility. He
said he came ito be told, not to tell. >
He emphasized, however, that
what revision of corporate taxes
was undertaken at this time should
not curtail existing revenues.
IF tax revision were confined to
tax reductions" he said, "the result
ipo 1,pcorto oirtv oS fo O1Ir future
(See TAXES, Page A-3O