Evening star., 1941-08-20
Senate Hearing Told
Non-Defense Outlay
Can Be CurtaiIed
Business Spokesman
Also Urge Replacement
Of 'Hit-or-Miss' Toxes
BY the Associated Press

Ing - $50, 100000 TAX Dill, TWO ouSl-
nessmen's witnesses told the Senate
Finance Committee today that non
defense expenditures could and
should be reduced.
The witnesses were Laurence
Arnold Tanner. representing the
Merchants Association of New York
and Paul w. Adams, spokesman for
the Manufacturers Association of
Connecticut. Both suggested re-
vision Of the House approved rev.
enUe measure, and Mr.. Tanner urged
that the "hit-or- miss method of i'm
posing a series of miscelleaneoul
taxes" be replaced by either 4 gen.
eral excise tax on manufacturer OF
Withholding tax" on all wages
dividends and other personal income
payments.
Under the latter levy. q proper
ton Of the taxpayers' income would
be withheld at the source and turned
over to the Government. Such q
levy. Mr.. Tanner declared. would
be sounder in principle, less COM
plicated and uncertain, and more
easily collectible than large asgre-
gate OF excise or nuisance taxes. y
Nom defense Burden.
The people of this country are
ready to pay any taxes required
to insure its safety" the witness
told the committee But =
Congress owes it to them to reduce
to the lowest possible minimum
the burdens of non-defense govern
mental expenditures"
Mr.. Adams expressed q similar
view. He urged that the finance
group retain a House-approved pro-
vision permitting corporations to
compute their excess profits taxes
either on the basis OF invested
capital or the basis of average
earnings. The Treasury has ia
vored only the invested capital
method.
Ray Murphy OF New York City,
assistant general manager OF the
Association of Casualty and Surety
Executives, asked that the revenue
laws be amended 30 that large COM
mercial mutual casualty and surety
companies would be taxed on the
same basis as capital stock COM
par,ies.
He said that capital stock casualty,
f1re and surety comps nies were re-
qtiired to pay the same tax rates
as were applied to corporations in
other fields of industry, whereas
large. commercial mutual COM
panies almost completely escape
the payment Of Federal income
taxes"
Collection at Source.
Contending that excise levies pro-
posed in the House bill constituted a
oge-podge," w. j. Schieffelin. jr.,
chairman of the Taxation Commit
tee of the New York State Chamber
OF Commerce, asked the committee
yesterday TO approve either a retail
sales tax or q tax on all gross in
comes paid out to individuals. the
tax to be collected at the source
without exemptions.
In addition, he recommended
that individual income tax exemp-
tions be decreased, that the normal
tax on individual incomes be raised
from the present 4 per cent to 6
per cent and that the capital stock
and related declared value excess
profits tax on corporations be abol-
ished. with an increase in the nor
NAL corporation rate from n per
cent to not more than 80 per cent.
The House bill, he asserted. could
neither prevent imitation or main
tain the Nations credit unimpaired. =
Excess Profits Limits.
Martin Peter, national secretary
of the Lawyers Guild, proposed that
profits in excess of per cent return
on invested capital be subjected to
an 30 per cent levy in order to pro-
vide IAN effective excess profits tax"
He urged mandatory joint returns
for husbands and wives, elimination
Of exemptions Of Government Sc
curities and an increase in estate
and gift taxes.
Mr.. Pepper also proposed restora-
ton Of last years individual income
tax exemptions of $500 for married
persons and 81 500 for single persons
70 that the impact of higher sur
taxes would be cushioned"
He asked the committee to reject
all proposals for excise taxes on
necessities, new sales taxes or levies
on lower-bracket incomes.