Evening star., 1939-03-16
Business Tax Change
Not Likely 10 Alter
New Deal Program

Proposed Revision
Is Expected to Keep
Roosevelt PIuns Intact
BACKGROUND
Tar reUision has become
major issue In the ddminiStra-
tion'S driue tolDqrd pleasing busi-
ness. Secretary Morgenthau is in
the forefront of conversations on
ho,D the reuision may be dchieued.
The aim is to reduce the burden
on business without depriDing the
Treasury of essential revenue.
BY the Associated PDss.
Although some revision of busi-
ness taxes appears highly probable
this spring, there were strong indi-
cations today that the administra-
tion's drive to stimulate business
activity would stop short of nullify-
ink any New Deal fundamentals.
This was the generally accepted
Interpretation of the Securities Com
missions rejection late yesterday of
proposals by stock exchange COM
mittee for drastic modification OF
Federal securities regulations.
S. E. G. Chairman Douglas told
reporters that the proposals, in
terms of business improvement, were
"a phoney" and that to open the
doors 80 the boys up there can
have another party isn't going to
help at all"
Details Not Revealed.
Secretary Morgenthau indicated
today the administrations tax-re-
vision plan will not be made public
until after the first week in April.
The Secretary said at a press
conference he would have nothing
to say about taxes until he testifies
before the House Ways and Means
Committee, after a two-week vaca-
ton he will begin March "a.
Besides saying that progress
was being made on the tax program,
Mr.. Morgenthau answered all ques-
tions about details with the COM
ment:
II am not forecasting or broad
casting"
Mr.. Douglas statement came in
the midst of administration efforts
to unity business taxes-Without
curtailing revenue-aS a token OF
Government cooperation with in
dustry.
Gives Three Assurances.
The President himself has held out
three assurances to business:
l. That the New Deal program is
virtually completed and there will be
no new major legislation.
2. That no new taxes are contem-
plated.
3. That no new Federal expendi-
lures are in prospect.
Administration critics in Congress
have linked business improvement
to Federal economy. They have in
sisted that the present level of ex-
penditures be lowered and that busi-
ness also be encouraged to 60 for
ward by modifying corporation
levies.
Administration leaders at the
Capitol are skeptical Of achieving
any real economy this session.
Democratic Leader Barkley of the
Senate said today there was gen.
eral agreement on the principle of
economizing. but that none could
decide whether practically 1t might
be applied.
Advocates of tax revision studied
Treasury estimates that revenues on
1898 incomes would be substantially
less than those for 1887 because of
last years business downturn. The
deadline on first installment pay
ments was last midnight.
Budget experts forecast that up
ward of $425 .O00,0 will have been
collected in March this year, COM
pared with collections of $723,O00,-
600 in March year ago.
Morgenthau Recommendations.
Secretary Morgenthau expects to
make recommendations for revision
Of corporation taxes after March IS
returns are analyzed. Since Presi-
dent Roosevelt has laid down the
rule that as far as ne is concerned
revisions must not reduce revenues,
some taxes may have to be compen-
satingly increased.
Chairman Harrison, Democrat, of
Mississippi, of the Senate Finance
Committee said yesterday he did
not believe that such increases would
carry the 10 per cent maximum of
present corporation taxes up to
more than % per cent.
He said this estimate contem-
plated abandoning present taxes on
capital stocks, excess profits and un-
distributed profits and substituting
fiat corporation income tax.
The Finance Committee chairman
and Representative Cooper, Demo-
cret, of Tennessee, conferred with
President Roosevelt yesterday and
expect to go to the White House
again when studies of March Is re-
turns are completed.
Senator Harrison reported a spirit
Of cooperation among officials in
efforts to smooth out business taxes
and predicted that eventually levies
which might deter business activity
would! be removed.
Mr.. Douglas, in his statement re-
jecting the stock market COM
mittees proposals, said the chief
recommendation. was relaxation of
regulations against manipulating
the market.
That. he declared. would bring
the pool operator back into the mar
ket" and strikes at the very heart
Of stock market regulation"
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