The Waterbury Democrat., 1939-05-16
BUSINESS TAXES
 MAY BE REDUCED
Roosevelt Objects to One Plan as It Would Hit at
 Small Business
BY LYLE c. WILSON Inifed preSS Staff COrrA Sn0udenfl

(Un1ted Press StaH COrreSpOndent)
 Washington, May 16-(UP)-Re- taxation of business deterrent" taxes was practically assured today under 8 conservative democratic program presented to the White House almost as an ultimatum. The plan would abandon the New Deals undistributed corporation surplus tax.
 Chairman Pat Harrison, D., Miss, of the senate finance committee, was understood to have presented conservative proposals to President Roo 2elt.
 Penalize Small Business
 MT. Roosevelt did not commit himself but objected that the pro- gram would penalize small business.
 Differences between conservatives and the president were forcing congress rapidly to the brink of bit- ter dispute over the tax question.
 Harrison was one of a group which conferred two hours on Tax es at the White House yesterday. The president suggested another conference.
 Approximately $1,7Oo00o,OOO of corporation and manufacturers ex- else levies expire this year. The least the house can do on taxes is to pass a resolution extending these through 1940.
 Will House Stand By? If administration pressure limits house action to such resolution, Harrison is understood to have in- formed the president and chair man Robert L. Doughton, D., N. C., of the house ways and means com- mittee, that the senate will do the proposed tax revising. It then would be a question as to whether the house would stand pat or give in to the senate.
 Doughton left the White House conference predicting tax revision at this session, but iE general terms. Secretary of Treasury Henry Nor genthau, Jr., and Undersecretary John w. Hanes also were present. Two Requirements
 The president has said repeatedly that he would accept corporation tax revision provided 1t met two requirements:
 l. Revised taxes must raise as much as existing levies. 2. Abandonment of the corpora tion surplus tax must be accom- panied by some other safeguard against tax avoidance. Harrison was understood to feel that his plan meets those require ments MT. Roosevelt was said to have received it coolly. The fact that no concrete progress was re- ported yesterday indicated that the president did not agree that his re- quirements would be met by sug- gested changes.
 Harrison Plan
 The plan Harrison outlined was substantially as follows:
 l. Abandonment of the unistrib- uted surplus tax, maximum 2h per cent levy on accumulations of surplus by corporations earning more than $25,000 net annually.
 2. Remove the $2,000 limitation upon charges of capital losses against capital gains for tax pur- poses.
 3. Permit corporations to carry over operating losses for three years to be charged for tax purposes against operating income which might develop in that peroid.
 {. Substitute an 18 per cent cor poration income tax for the present rate which is graduated from 16h to 19. This tax would be on cor porations earning more than s25 900.
 5. Retain the corporation stock tax and the excess profits tax but permit corporations to declare re- valuation this year instead of wait- ing until 194l.