The Waterbury Democrat., 1941-08-11

CCoutinued from Page D costs slightly" But he thought it would be more than justified bee cause otherwise citizens would be forced to go to banks and finance companies for loans which would involve an enormous volume ot in- terest payments"
 Taxpayers now are permitted to pay in quarterly installments. The treasury already has started 8 "pay-as-you-go" system to help meet the 1942 taxes. It sells Securi- ties which may be cashed in next year when the payments are due. Herring also endorsed a plan whereby employers would deduct income taxes from employees wages throughout the year.
 He endorsed Morgenthau's pro- posaI that personal income exemp- tions be lowered to $750 for single persons and $500 for heads of families they are now $500 and $2,- l 900.
 Witnesses before the committee today are Isidore B. Dockweiler, Los Angeles, and Ben White Sim zig, Hollywood, representing repair CTS of auto accessories and parts; Harcourt Avery, Boston, invest | ment bankers of America; J. c. WilIever, New York, Western Union Telegraph Co.,; Robert B. Skinner, Newark, N. J., Laundry Machinery Manufacturers Association; Joseph Dombroff, New York, National Photographic Dealers Association; Milton Diamond, New York, Decca Record, Inc; George A. Hughes, Chicago, Edison General Electric Appliance Co.,; George R. Blodgett, Boston, Motor Oils Refining Co. i New Way To Tax
 The investment bankers associa- ton of America proposed today that the Senate Finance Committee boost the yield of the pending $3,326, ,700,- 900 tax bill by placing a special 10 per cent "excess profits" tax on in- dividual salary or wage increases.
 Harcourt Amory of Boston, chair man of the associations committee on federal taxation, presented the proposal to the committee. He also suggested purchase" taxes of and 1 10 per cent on certain semi-luXury and luxury items, many of which already would be taxed at those a. mounts in the pending bill. Discussing his proposal for tax on salary increases, Amory said:
 "Such a tax, placed at 10 per cent of the annual net income increase, would be substantial revenue pro- ducer and would make those in- dividuals fortunate enough to bene- 1 fit directly or indirectly from the defense program contribute small share of the benefits received to the government
 Under his plan, the tax on wage increases would be levied in addi- 1 tion to the normal income tax and proposed surtaxes.-
 Amory also suggested: Broaden Tax Base Broadening the tax base through lower individual exemptions and in- creasing the income levy on persons in the $2,000 to $10,000 income bracket.
 Higher taxes on cigaretts, liquor, beer, and an additional l cent a gallon levy on gasoline.
 Amory based the purchase tax proposal, similar in effect to 8 sales tax, on plan now in operation in Great Britain.
 He proposed exempting from the tax all purchases regarded as abso- lute necessities for people with limited buying power, such as rent, food, gas, electricity, education, coal, hildren clothing, machinery, farming equipment.
 He suggested that per cent tax be levied on semi-luxuries--goods that could only be acquired by those with greater buying power than those in the lowest income class.
 Goods in the luxury class, such as furs, jewels, toilet preparations and cosmetics, should be taxed 10 per cent, he maintained. A virtually identical scale is provided in the pending measure.
 Amory said the British purchase tax, at higher rates than those he proposed, was based on wholesale prices and thus avoided pyramiding.