Evening star., 1939-05-26

Secretaries Morgenthau and Hop
kins all talked of remoping busi-
ness deterrents. In ensuing
months, hoUeDer, little ,uas ac-
complished until recent apparent
determination of group led by
Senator Harrison to force action
brought administration leader
ship to point OF alloUing Treasury
to submit its recommendations.
BY the Associated Press.
President Roosevelt remarked that
tax discussions were getting along
very well when asked to comment
today on congressional efforts to
speed a limited revision of corporate
levieS.
He. did not reply directly when
asked whether projected tax legis-
lation would be confined to So
called nuisance and corporation
taxes, or whether it would deal also
with personal income taxes.
He told his press conference in
stead that he had better not 60 into
details because things were getting
along so nicely.
Up to the last week, he added.
the primary causes of delay on tax
legislation were what he described
as fool stories with too much detail
and too little truth.
MOrgenthau I'm Tomorrow
Secretary of the Treasury Nor
genthau will testify on taxes to-
morrow before the House Ways and
Means Committee.
Coupled with the proposed changes
in corporate taxes, administration
supporters sought enactment of a
new system of loan insurance for
small businessmen.
Chairman Wagner of the Senate
Banking Committee set next Wednes-
day for hearings on bill by Senator
Mead, Democrat, of New York, pro-
viding R. F. c. insurance on bank
loans to small businessmen. Senator
Mead forecast prompt approval of
the program, similar to the Federal
Housing administration insurance
system of home construction loans.
He said he had received statements
favoring it from the Treasury, the
Federal Reserve Board and the
Securities and Exchange Commits
sion. His bill would place $1,000,-
900 maximum on a loan.
To Write Own Program.
The House Ways and Means
Committee was expected to consider
proposals to eliminate taxes which
have been criticized as business
deterrents." Suggestions have been
advanced both by Treasury experts
and by Chairman Harrison of the
Senate Finance Committee Mem
bers of the House group made it
clear. however, they would write
their own program.
Tax authorities predicted the
new program would involve COM
plete elimination of the undistrib-
uted profits tax, which imposes
varying rates according to the
amount of profits corporations dis
tribute in dividends, and substitu-
ton Of a fiat 18 per cent tax rate.
Mr.. Roosevelt has said he would
agree to elimination of the profits
tax provided it did not lead to
individual tax lodging through
accumulation of surpluses in close
ly-held corporations.
Penalty Tax Strengthened.
To meet this condition, Senator
Harrison and other Congressional
leaders were said to have agreed
to strengthen a present penalty
tax on improper accumulation of
surpluses. The existing law pro-
vides that if tax avoidance is at
tempted through retention of cor
porate surpluses, the Treasury may
levy Is per cent tax on the first
$780, 900 so retained and IS per cent
on any additional money retained.
Representative Doughton, Demo-
crat, of North Carolina, chairman
OF the Ways and Means Committee,
announced that the tax laws would
not be thrown open to general re-
vision. and leaders in both branches
agreed there would be no tampering
with the existing schedule of per-
sonal income tax rates.
Leaders in the House and Senate
predicted the entire program would
be approved by Congress without
much delay. There was, however,
some dissent from that statement.
Two members of the House Ways
and Means Committee said emphati-
cally they expected the House to
produce its own revenue bill, re-
gardless of agreement reached else
where. They declined to go into de-
TAIL