Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-10-01
House Approves
Excess Profits
1axCompromise
FinoI Congress Action
On Bill Due in
Senute Tomorrow
BY the Associated Press.

Legislation leVylng on corpora.
tons an excess profits tax Of Is to
so per cent was voted finally today
by the House. The action put Con-
gress one notch nearer an election
recess which leaders hoped to start
this week end.
The measure, put into present
compromise form by a Joint COM
mittee after House and Senate had
passed differing versions, now goes
to the Senate. where approval, ex-
pected tomorrow, would send it to
the White House. In addition to its
tax sections. 1t carries provisions de-
signed to speed up armament pro-
duction and furnish a system of in
surance for the Nations fighting
men.
Including 81 per cent boost in
the normal corporation income tax,
the bill will produce. tax authorities
said. $500 10000 in revenue the
first year and about $1,000, 000. 00O
thereafter. Chairman Doughton OF
the Ways and Means Committee
told the House that enactment of
the bill was necessary to- meet q
"dire need" Of the Government for
more income in these days Of heavy
defense spending.
When the tax bill clears the
Senate, Congress will have only one
major item on its calendar
81, 469 1913 ,636 defense appropriations
measure which carries funds for the
CONSUMPTION program and expansion
Of the standing Army. This has yet
to be acted on by the Senate Leaders
expressed confidence it could be
sent to the White House this week.
Defense Speed Provisions.
Defense speed-up provisions of
the tax bill:
l. Would permit manufacturers to
deduct from their taxable income
over a Swear period the entire
cost Of defense production facilities
completed after June 10, 1910.
2. Would suspend present profit
limitations on the manufacture Of
warships and military aircraft.
Moreover, the measure would set
up a new Government insurance
system for draftees, National
Guardsmen on active duty and other
soldiers and sailors, permitting them
to obtain policies up to $4,000 at
low rates.
The a. v>or can't corr,oro t;cy, in
come tax increase would boost the
normal rate from the present 200
to "a per cent. Special lower rates
for corporations with less than
5000 net income would not be
affected.
First 5000 Exempt.
Under the excess profits tax
schedule the first $1,000 of profits
would be exempted with credits"
based either on a concerns past
earnings or its invested capital also
to be allowed. The minimum credit
would be 8 per cent of a corpora
tons currently invested capital.
All earnings in excess of the eX-
emption and credits would be tax
able at Is per cent on the first
$4,000. 80 per cent on the next
$4,000, IS per cent on the next
$4,000, 40 per cent on the next
$3.50 900, As per cent on the next
$3.50 900 and so per cent on all over
100000
Deluge of Letters.
Because of the anti-adjournment
sentiment in a deluge Of letters to
Congressman, it was explained, all
hopes of winding up the present ses-
sion have been discarded Instead,
the objective has become a recess
until after the November election.
Senate Majority Leader Barley
arranged to confer with House chiefs
on the subject during the day. Sen
ator Barley has contended that
Congress could finish its work this
week end and adjourn until Janu-
airy, but it was believed that as a
compromise he would suggest a
recess be taken until November IL.