Evening star., 1939-03-23
Tax Revision
Proceeds, Says
Morgenthau
Negotiations With
Congress Going
Ahead as Expected
BACKGROUND

BACKGROUND
Agitation for revision OF cor.
porate tares has been near boil.
ing point since President Roose.
Delt offered initial encourage
ment early in February. With
administration leadership subse-
quently taking Facilitating stand,
Senate bloc led by Senator Hdr-
rtson has taken lead In hdpin1
Treasury submit preliminary es-
Inmates and proposals.
| Py the Associated Press.
Secretary Morgenthau said today
tax revision negotiations between the
Treasury and Congressional leaders
were proceeding "in an orderly way
and according to schedule"
The Treasury heads statement, at
press conference, appeared de-
signed to allay doubts about the
administrations attitude toward tax
revision. Some such doubts had
arisen from President Roosevelt's
criticism of certain tax lewiston pro-
posals.
Secretary Morgenthau said:
"As between Senator Harrison,
Representative Doughton, Repre-
sentative Cooper and the Treasury,
things stand just where they stood
when we exchanged letters which q
few weeks ago promised an exchange
OF suggestions after March IS tax
collection data was available.
The Treasury is ready and anx-
ious to have an opportunity to lay
our tax studies before the proper
committees"
Silent on Details.
He declined to discuss details of
Treasury proposals or to say under
whose sponsorship the tax program
would be undertaken.
Expressing qualification that
March income tax collections were
substantially above estimates" the
Secretary added that this made it
easier to proceed with the tax re-
vision program.
The excess of collections over esti-
mates, he explained, resulted from
the fact that profits of corporations
in the fourth quarter of 1898 were
much better than had been ex-
pected.
Mr.. Morgenthau reiterated that
ne expected to testify before the
House Ways and Means COMMITTEES
on taxes about the middle of April.
He will leave tomorrow night for q
two-week vacation at Sea Island, Ga.
Before he leaves, however, he will
60 before the same committee to-
morrow morning to give the Treas.
ury's attitude on social security leg.
islation.
In commenting on March income
tax collections. the Treasury chief
said he had no information yet on
what was the yield from different
portions of the income tax. He was
asked especially about the effect Of
last years drastic modification of
the undistributed profits tax.
Tacit Approval Seen.
Earlier, congressional advocates Of
tax revision as business stimulant
had contended that chances for &C.
ton this session depend on the atti-
tude Of the President.
| Some administration leaders else
where said they expected no word
from the President, but that he
might give tacit approval If House
and Senate committees proposed
changes.
Mr.. Roosevelt sent to Chairman
Harrison of the Senate Finance
Committee yesterday preliminary
Treasury tax studies. They con-
tained no recommendations, but said
taxes criticized by business could be
eliminated If fiat % per cent tax
were imposed on corporations with
income in excess of $25,0O0. Such
firms now pay l6h to 10 per cent.
Senator Harrison said proportion
ately lower rates could be continued
for small corporations now paying
121a to 16 per cent.
1924, ZOO, 900 Revenue Loss.
The taxes which would be elimi-
mated by higher income levy, the
Senator explained, are those on un-
distributed profits, excess profits and
capital stock. He added that this
would bring revenue loss of about
1924, 900 900, which would be made
up by the % per cent fiat tax.
Senator Harrison emphasized that
the proposal was not his, and that
he was interested only in "co-operat-
Ing with the Treasury to try to help
the business situation"
Mr.. Roosevelt has indicated, on
the other hand, that the Treasury
Is seeking to cooperate with con-
gressional committees rather than
to advance specific recommendations
for overhauling the revenue system.
The President told reporters re-
Gently that the Treasury was meet
ing Senator Harrison's request for
information, but that its studies
were not pointed toward formula
ton of specific recommendations.
Harrison Wants Harmony.
Senator Harrison said in a state
ment last night that with the DELI
cate foreign situation and current
domestic problems I'VE cannot afford
to have misunderstanding among
ourselves, and when differences arise
whether economic, fiscal or politi-
cal-they must be harmonized to
preserve and promote the general
welfare Of the whole country"
Coincident with the talk about
taxes, legislators continued to dis
cuss proposals for curtailing Gov
eminent spending. Mr.. Roosevelt
said Tuesday 1t would be WORTH
while to consider q reduction in
Federal spending If there could bs
some guarantee that private indus
tries would take up the employment
slack which would result.
A House Appropriations Subcom-
mittee has postponed action on the
Presidents request for an additional
$150, ,000, 900 relief appropriation.
The House Rules Committee an.