Evening star., 1940-10-02
Excess Profits Bill,
Bitter|yAttacked,
Goes 10 President
Big Defense Money Bill
Now Last Obstacle to
Recess Of Congress
RS the Associated Press.


The complex excess profits tax
bill, voted after weeks of conten-
ton, reached President Roosevelt S
desk today, but already congress
Sional dissatisfaction with the meas
ure was being voiced, and there
were bipartisan demands for a
thorough overhauling of the entire
national revenue structure.
One of the last big obstacles to a
sought congressional recess
the excess profits legislation whipped
through both House and Senate yes
terday in rapid fashion. The Presi-
dents approval was expected
promptly because the bill contains
provisions deemed essential for fur
thering the defense program.
Congressional action on an excess
profits measure left only the ST.
480,0O0,0O0 defense appropriations
bill as the major obstacle to recess.
This bill, carrying the funds for the
conscription program and the crea-
tion of an expanded Army, already
has received House approval but has
not vet been reported out OF the
Senate Appropriations Committee.
Check on Recess Date.
With November II and November
l8 mentioned as dates until which
recess should be taken, House
Democratic leaders made an lntor-
NAL checkup on sentiment today.
In the event opposition materiallzes
to a layof of such duration, 1t was
understood that leaders would re-
sort to a series of three-day recesSeS
for the period
As the excess profits bill went to
the White House, opponents con-
tinued to inveigh against it as a
tax atrocity" which falls far short
of objectives both in producing rev.
enue and in preventing swollen prof
its in defense industries.
The bill has these four main
points:
l. 1t would increase the normal
corporation income tax on firms
earning more than s25,000 a year
from the present rate of 20.9 per
cent to "a per cent.
2. 1t would levy an impost of
from 25 to so per cent on what
the bill designates as excess prof
its"
3. It would suspend existing stat
utory limitations on profits that may
be made on Government warship
and aircraft contracts.
4. 1t would permit industries to
deduct from taxable income over
five-year period the cost of facili-
ties and expansion necessary to ham
Gle defense contracts.
Yield Drop in Bucket.
The bills yield was estimated at
s525. 100000 on 1910 income and be-
tween S900,00000 and $1,000, 100000
in subsequent years.
Opponents were quick to point
out, however, that this additional
revenue would be a mere drop in
the bucket when compared with the
l5,000,000,000 in defense outlays
voted by this session of Congress.
Reminding the Senate that the
deficit being created for defense
would have to be paid some time,
Senator Connally, Democrat, of
Texas asserted:
I'VE might as well make up our
minds now that, beginning in Jam
uary, it will become necessary for
Congress to revise the tax struc-
ture to raise what might be con-
sidered staggering sums"
Senator Vandenberg, Republican,
of Michigan, calling the measure
an "imponderable mess" and tax
atrocity," charged that it failed to
offer even an approach to the reve-
nue. which would be needed to
offset a deficit which he predicted
would reach S100OO,OOO $1,000 this
year.
1T Is perfectly obvious Senator
Vandenberg declared, that there
has got to be a realistic, basic, fund
amental revision of the tax struc-
ture."
Provides Draftee Insurance.
These views were echoed by Sena-
tor King, Democrat, of Utah, who
warned colleagues that when they
began the new session in January
they might be faced with the ne
CeSSity OF voting taxes to raise up
TO $4,000, 100000 a year.
Some such possibility also was in
mind of Representative TreadWay,
Republican, of Massachusetts,, who
told the House that the excess profits
measure was only the entering
wedge of the most eXtravagant line
of taxation this or any other country
ever has known"
In addition to the excess profits
levy and defense provisions, the tax
measure contained section under
which conScripts and other members
of the armed forces may obtain low
rate Government life insurance.
Policies would range up to $4,000
1t also provided that beneficiaries
of the Railroad Retirement Act who
have served in the armed forces at
any time since the Spanish Amer
lean War be given increases in their
pensions by allowing time spent in
the Army or Navy to be included in
their railroad service.
Senate Majority Leader Barkley
said he expected House leaders to
reach decision on recesSing today.
indicating that the Senate would &C
Cept the Houses decision. Senate
Republican Leader McNary said,
however, that Republicans would
oppose anything but three-day
recesses, with an agreement that
members should be notified in suf-
flcient time to return before any
major legislation was considered.