Evening star., 1940-06-20
Huge War Profits Tax
Voted by Senate in
Passing Revenue Bill
Non-ControversiaI
Pleas Are Cast Aside
By Defiant Members
~ the Associated Press,

bsSOS VIS SuSt /ASuOS
By Defiant Members
3y the Associated Press.
A defiant Senate ignored admin
istration pleas for . non-controver-
sial revenue bill last night and ap-
proved defense tax legislation only
after voting stringent 1evies on those
who would profit from war
The chamber agreed to the lower
income tax exemptions and most of
the excise tax boosts which the
House passed in an effort to raise an
extra LOOT 900 900 a year. Then the
Senate added:
l. An immediate excess profits tax
on all corporations to produce be-
tween 100000 600 and $500, ,o00, 900
annually.
2. War profits taxes which Senator
Connally, Democrat, of Texas, the
sponsor, estimated would raise about
$4,000. 900 900 a year from individuals
and possibly a like amount from
corporations. The levy would 60
into effect only upon q congressional
declaration of war.
This amendment" Senator Con-
nally said, "milks the old COW down
to the point Of exhaustion, but 1t
doesn't quite put her out of busi-
ness
Unfav0r2ble Action Seen.
The legislation now goes tc a joint
Senate-House committee, which
many lawmakers predicted would
throw out the Senate proposals.
Senator La Toilette, Progressive,
of Wisconsin argued that the coun-
try would regard as pure snam"
any revenue bill which increased in
come taxes on individuals and made
no provision for draining off excess
pronts from industries which profit
from the European war.
Senator La Toilette won, II to
81, despite arguments by admins
tration lieutenants that excess
profits legislation should await a
thorough study by congressional
committees. Chairman Harrison of
the Finance Committee promised
that such q study would start
within 80 days after the pending
measure was enacted.
The vote on Senator La Follettes
proposal took much Of the fight out
OF administration forces and many
of them voted for Senator Con-
nally's amendment, which carried
81 to %.
Vote Demanded.
The final 75-to-5 vote approving
the tax bill came at 1890 pm. after
weary Senators had shunted of
many speeches with loud cries OF
vote! Vote!"
Senators opposing the measure
were Austin Of Vermont, Quincy Of
South Dakota, Hale of Maine and
Taft Of Ohio. Republicans, and Lun-
deem Of Minnesota, Farmer-La-
borite.
The Senate changes in the tax
measure threw new obstacle in
the way Of leaders seeking to have
Congress recess Saturday until Au-
gust l. Their goal was to complete
action on the tax legislation before
the recess and leaders were still
hopeful despite the necessity for
adjusting differences with the
House.
Several Senator's made new de-
mands yesterday that Congress re-
main continuously in session. Sem
ator Ashurst, Democrat, of Arizona
disagreed with Democratic Leader
Barkley's contention that "it would
be wholesome If we could get back
to our people-go to church, go to
the lodges, go to the women and
find out what they are thinking"
Senator Ashurst said he knew
what the people were thinking with
out going home to stand on the
drugstore corner"
2,190,O00 New Taxpayers.
The tax bill. approved after three
days Of Senate debate, would create
2,190, 900 new taxpayers by reducing
present income exemptions from
$2,50O to $4,000 for married persons
and from $1,000 to $500 for single
persons.
1t would add per cent to existing
corporation taxes, increase all in
dividual income tax payments by a
fiat 10 per cent, boost surtaxes on
incomes between 5000 and $10O, 900,
and increase such so-called nuisance
taxes" as those on gasoline, liquor,
beer, amusements, radios and me-
chanical refrigerators.
The Federal debt limit would be
raised from $45,0OO, 900 900 to 49,
O00, 900 900, and special $4,000, ,000,-
600 issue of defense bonds would be
paid of with revenue from the
new taxes over five-year period.
The Senate eliminated a House.
approved increase In tobacco taxes,
including penny-a-package boost
on cigarettes. To make up for this
$4,000, 900 loss Of revenue, it in
serted a new schedule Of amusement
taxes imposing a 10 per cent levy on
all admissions costing 10 cents or
more. The House bill would have
started the tax at 30 cents. Under
present law, the tax begins at 40
cents.
Corporation Exemptions.
The La Toilette excess profits
amendment would allow corporations
q $4,000 exemption plus an amount
equal to per cent Of their invest
ed capital. Other Federal taxes
would be deducted before computing
profits.
A corporation would pay 20 per
cent on profits in excess Of the ex-
emptions, up to a 20 per cent re-
turn on invested capital. On profits
exceeding a 20 per cent return on
investment it would pay 40 per cent.