Evening star., 1941-08-19
Lower Exemptions
For Income Tax Urged
By Manufacturers
General Sales Levy
Also Asked to Roise
More Defense Money
BY the Associated Press.

A spokesman for the National
Association of Manufacturers urged
Congress today to lower individual
income tax exemptions and levy a
general sales tax as "a major source
of Federal revenue"
At the same time, the association
registered its belief that economy
ranks first as a means of securing
funds to finance today's national
emergency"
Livingston w. Houston, chairman
of the N. A. M. Committee on Gov
ernment Finance, presented the as
sociation's views to the Senate
Finance Committee which is con-
sidering the House approved $685.
100000 tax bill.
ut does not seem Just" he said in
a prepared statement. for Congress
to consider tremendous new tax
burdens without taking prompt and
decisive action to eliminate non
essential governmental spending.
We urge Congress at this time, when
it is demanding great sacrifices
from the people. to slash every pos
sible dollar of non-essential spend
ing"
Claims Public Support.
Mr.. Houston declared that samp-
lings of public opinion show clearly
that the American public is willing
to accept sales taxation as an easy
way to pay-as-you-go in amounts
which will not be greatly missed
from day to day." They showed too,
he said, that the general public
wanted tax bill which would reach
low-income brackets now exempt.
He submitted graphs Of potential
tax yields, drawn on the ASSUMPTION
that the present $4,000 exemption
for married persons would be low
cred to $3.50 and the $500 single
exemption to $500. with exemptions
for dependents set at $500 instead
of s400.
A 4 per cent income tax on this
basis. he estimated, would produce
s13, 100000 from income groups of
from 81 to $1,000.
Mr.. Houston approved a proposed
increase in the normal corporation
tax rate to 80 per cent, but opposed
any increase in existing levies on
excess profits.
Senator La Toilette, Progressive.
Wisconsin. a Finance Committee
member, meanwhile expressed will
lingness to support tax bill which
would raise $1,000 900, 900 In new
revenue provided the measure was
based on ability to pay"
Opposes Soaking" Poor.
The Wisconsin Senator has long
advocated broadening of the in
come tax base as means of raising
revenue, but he told reporters that
he was opposed to any measure that
was going to soak the poor."
A similar position was taken be-
fore the committee yesterday by
Edward A. ONeaI, president of the
American Farm Bureau Federation,
who urged the raising of more rev.
enue to meet defense costs and
check imitation, but expressed oppo-
slt1on to any new sales or excise
taxes.
The proposed bill should be
amended" he said, so as to re-
quire every one to contribute to
national defense according to his or
her ability to pay"
He asked that existing incoms
tax exemptions be cut to s4Oo for
single persons and $500 for married
persons, with 5000 credit for each
dependent.
Wants Higher Profits Tax.
Mr.. O'Neal contended that the
Federal revenues should be brought
up to point equal to two-thirds of
expenditures. He asked the COM
mittee to put stop to 'profiteering
at the expense of national defense
| and security" and to use taxation
| powers as the most effective way
| to prevent disastrous imitation"
Mr.. ONeal also contended that
the present excess profits tax was
too low.
I'VE respectfully urge" he said,
that the rates on corporate in
come be graduated upward to re.
capture larger percentage of ex-
cess profits, and that the average
earnings option be modified to pro-
vide that all profits above a reason
able maximum return on invest
ment be considered as excess profits
and subjected to the same schedule
OF rates as applied to all other
corporations"
Spokesman for labor and manage
ment in the brewing industry urged
the committee to make no increase
in the existing tax on beer, contend
ing that the levy as increased last
year had gone beyond "the point of
diminishing returns
Fears Loss of Revenue.
at is evident" Clinton M. Hester,
| counsel for the United States
Brewers Association, testified. that
the point of diminishing returns has
not only been reached, but passed.
and once 1t has been passed, further
increases in excise tax rates on beer
may be expected to result in further
decreases in tax revenue to the
Government"
Joseph Obergfell, secretary-treas-
urer of the Brewery Workers Inter
national Union, expressed agreement
and predicted that an increase in
the beer tax would bring about an
unwholesome condition, such as pre-
vailed during the prohibition era,
namely home brewing would, un-
questionably. be revived, with all its
attendant evils"
Urging numerous amendments In
application of the proposed new
levies, Henry B. Fernald of Mont
clair. N. j., chairman of the Tax
Committee of the American Mining
Congress. also asked cut of $4,000
100000 in non-defense expenditures.
I'VE can'more easily and equitably
cut $2000,000. 900 from our monde
fense expenditures. he said, than
we can raise that much in additional
| taxes"