Evening star., 1939-05-12
End Profits Tax,
But Bar Evasion,
Roosevelt Says
President in Favor Of
Action if Legal Check
Can Be Found
BACKGROUND

ADMINISTRATOR tQtK OF LQL re-
piston. long agitated by business,
began nearly sir months ago and
Das accepted as indication the
present Congress would take dc-
ton along this line. AS the
months passed. hoWeUer, the talk
became spasmodic and action ,Das
at minimum. Reports noU in
dicdte split .Uithin the ad-
n1inistration leadership over
Uhat. il anything. is to be done.
BY the Associated Press.
President Roosevelt said today he
would favor repeal of the undis.
tributed profits tax, provided some
other method was found to prevent
what he called legal tax evasion by
the wealthy.
In a lengthy discussion of taxes
at press conference, the President
emphasized again his contention
that in place of any corporation
levies repealed, there would have tt
be found substitute taxes to bring
in the same amount of revenue.
He said the Treasury would SUBJ
NIT to congressional committees re-
suits of its tax studies, but that
they would not necessarily be in the
form of recommendations.
Mr. Roosevelt said those who have
ben clamoring for removal of deter
rents to business in the tax struc-
ture had failed to point out how
to raise the revenue that would be
lost.
He added some of these persons
in advocating such repeal were de-
liberately trying to remove restric-
tions on legal tax avoidance.
Draft Bill Approved.
The Senate Military Affairs Com
mittee. meanwhile, approved by a
l2-to-2 vote bill by Senator Lee
Democrat, of Oklahoma, to draft
money in wartime by forcing citi-
zens with a net worth of 81 900 OF
more to buy 50-year Government
l per cent bonds.
The action came after Senator
Bridges. Republican. of New Hamp-
shire. had challenged action by the
committee last week in approving
the measure unanimously at meet
ing at which a quorum of the II
committee members was not present
Mr. Bridges and Senator Gurney
Republican. of South Dakota voted
against the bill today, and the for
mer announced he would file
minority report.
Those present and voting for the
bill were Chairman Sheppard and
Senators Logan, Democrat, Of Ken
lucky; johnson, Democrat, of Colo
RADIO; Lee, Schwartz, Democrat, OF
Wyoming; Hill, Democrat, of Ala
bama; Downey, Democrat, Of Cali
fornia. and Slattery, Democrat, OF
Illinois. Senators Reynolds, Demo-
crat, of North Carolina; Minton
Democrat, of Indiana; Lundeen
Farmer-Labor. of Minnesota, and
Nye. Republican, of North Dakota,
voted for the bill by proxy.
Senators Thomas, Democrat, OF
Utah; Austin, Republican of Ver-
mont. and Holman, Republican, OF
Oregon were absent and unrecorded
Increase in Percentage.
The measure would provide that
persons with a net worth of 1,OOC
must invest per cent of their hold
ings in Government bonds in war
time The percentage of invest
ment would increase to IS per cent
for very wealthy persons.
The President got into the tai
discussion after he had been askec
about his recent conferences with
Treasury and congressional leaders
He said these had been primarily
explorative and he did not know
what was going to happen.
Asked whether he favored re-
vision of the corporate income
taxes, some of which expire this
year, the President said that
brought up large question.
He added there had been lot OF
loose talk about deterrent taxes and
then went on to say that cigarette
smokers and farmers might well
contend that taxes on them were
deterrent. For example, he said, il
a farmer paid less taxes he would
have more money to clothe his wife
Replacement Necessary.
Mr.. Roosevelt declared that if the
series of corporation levies which
have been talked about were re.
pealed, he and every leader in Con-
gress agreed they would have to be
made up from taxes on corporations
as a whole
Some persons favoring repea
wanted no substitutes, he said, add
ing that in common honesty the
revenue replacement angle should be
(See TAXES, Page A-3)