Evening star., 1939-05-14
Senate Leaders
Expect 10 Force
Tax Revision
Proposal to Continue
Corporate Levies
Will Be Resisted
BY G. GOULD LINCOLN,

The struggle for improvement Of
the Federal corporate tax structure
to aid business, made by Senate
leaders, is in a fair way to be won.
Administration pressure has failed
to move the Senate in this instance.
Senator Barkley of Kentucky, ad-
mlnlStration leader, has been told
fatty that any move to put through
a joint resolution merely continuing
the present corporate taxes, along
with the so-called nuisance taxes"
will meet with failure. Similar in
formation has been given to the
House leaders, among them Chair
man Doughton of the Ways and
Means Committee, should the House
go along with the proposal merely
to continue existing taxes.
Senators favoring tax revision at
the present session of Congress. in
Guiding Senators Walsh of Masa-
chusetts and King of Utah, insisted
yesterday that the Senate has the
votes to amend the corporate tax law
and will do so when the time comes.
The supporters of tax revision
hope for cooperation from the ad-
minlstration, now that the situation
has been made clear. But whether
they get 1t or not, they propose to
go forward with their plans.
Occupy Strategic Position.
In this case they occupy a strate-
gic position. The whole corporate
tax schedule, which brings in about
$1,000 100000 annually in revenue,
is due to expire by law on December
81. Unless something is done about
1t, unless the law is either extended
or rewritten, this revenue will be
lost. And the Senate supporters of
revision say there will be revision or
no law.
When Senator Barklev announced
recently a plan for merely con-
tlnulng the existing taxes and pro-
Vldlng for study" of the corporate
tax schedule and other taxes and
action at next winters session. the
announcement was interpreted on
Capitol Hill as the program of the
administration. Subsequent infor-
nation, following conferences with
members of the House. who in turn
mad conferred with the President,
has not dispelled this belief.
President Roosevelt's statement
regarding taxes at his Friday press
conference, plus his call for a con-
ference tomorrow afternoon with
Senator Pat Harrison, chairman Of
the Senate Finance Committee:
Representative Doughton. chairman
| OF the House Ways and Means Com
mittee; Secretary of the Treasury
Morgenthau and Undersecretarv
John w. Hanes were regarded at the
Capitol yesterday as clear indica-
tlons that plan for tax revision
will now be worked out.
Treasury Works Out Plan.
The Treasury Department. it was
learned yesterday. has worked on
one plan, calling for the repeal Of
the undistributed profits tax and
the capital stock taxes and the sub
stltutlon of a fiat % per cent
corporate tax, with some provision
made for caring for the smaller
corporations, particularly those
making S25 600 or less annually.
Another plan. also growing out Of
information obtained from the
Treasury Department. calls for re-
peal OF the undistributed profits tax,
but retains the capital stock tax
with important amendments. This
plan would fix an 18 per cent
corporate tax, with provision for
lower rates on corporations making
$4,000 or less.
The amendments to the capital
stock tax and excess profits levies
now existing would permit corpora
tions to make declarations of the
value of their stock each year, in
stead of every three years.
Corporations would be permitted
to carry over losses for two or three
years for tax purposes.
There would be repeal also Of
the present provision limiting cor
porations deductible losses to $4,000
a year to permit losses to be ac-
counted for under capital gains and
lOoSCo plOslSlOllS.
Second Plan Meets More Favor.
The second plan is regarded with
more favor on Capitol Hill. How
ever, the final details of the proposed
revision of the corporate tax struc-
ture will be worked out.
Senators favoring such revision in
sisted yesterday that ample pro-
vision is made in the existing tax
law to prevent tax evasions and
that there is no desire whatever to
open up loopholes or to permit tax
evasion, against which the President
has inveighed.
"One of the major and imperative
matters confronting Congress when
it convened in January was tax
legislation said Senator Walsh
yesterday. There was need to get
rid of the remnant of the destruc-
tive undistributed profits tax and
such other provisions of the present
law as yield little revenue but have