Evening star., 1941-08-23
Income Tax Rates
In Bill Far Exceed
1918, Senators Told
Finance Group Expects
To Conclude Hearings
On Measure Today
By ]. A. O'LEARY.

The 50 236, 900 900 House revenue
bill imposes income tax rates far In
excess of the 1918 World War period,
Lowell H. Parker, former expert to
the Joint Congressional Committee
on Internal Revenue Taxation, told
the Senate Finance Committee to-
day in urging further study be Civ
en- surtax rates and credit for earned
income.
In referring to the surtax sched-
ule, which starts on the first dollar
of net income by eliminating the
present $4,000 exemption, Mr.. Parker
said that in many cases it passes
the danger point and will not leave
the taxpayer sufficient reward to
give him the proper incentive" ..
Comparing taxes under the pres
ent bill with those in 1918. Mr..
Parker, who is now a tax consultant,
said:
In fact, every person with q net
income of over $4,000 pays more
tax under this bill, and many as
much as 80 per cent more"
Cites Inconsistencies.
Declaring that the measure of the
ability to pay was either all wrong
in 1918 or now, Mr.. Parker cited
the following inconsistencies:
1T is clear, for example, that
married man with 5000 net income
under this bill is deemed to be
able to stand a tax increase of "a
per cent over his 1918 tax, one with
$4,000 net income an increase Of
only 401s per cent, and with a $40
900 net income an increase of over
831a per cent"
Mr.. Parker also contended that
the pending bill is unfair to the man
with earned income as compared
with q person whose income is from
investments. To illustrate, he said,
q married man with $4,000 from
salary will be taxed $1,166. while a
married man deriving $4,000 from
investments will pay only $1.196.80,
a difference of only $50. Mr.. Parker
said he has figured that the man
living from investments has left
about $1,000 a year after living ex-
penses, while the salaried man has
only $400 left.
The witness also recommended
some relief for those who must pay
alimony. which is not allowed as a
deduction now. On the other hand,
the spounse receiving the alimony
pays no tax on it. He suggested
that alimony be included in the
gross income of the payee and ex-
cluded from the gross income OF
the payor.
Match Tax Protested.
The committee also heard protests
today against proposed new tax
on book matches, which are given
away, but must be bought by store
keepers. D. D. Bean, speaking for
independent manufacturers of book
matches, said the proposed tax
would amount to 80 per cent, or 81
on the usual shipment of So worth
of matches.
After hearing $50 witnesses sug-
gest revision in the rdbreaking
tax bill. the committee was to con-
clude public testimony today and
! then add at least $500 900 900 to the
House-approved tax load.
In the two weeks of hearings, the
committee has heard requests for
exemptions or notifications from
practically every group affected by
the measure. Chairman George,
however, told reporters today there
was slight chance that the COM
mittee would change the funda-
mental tax philosophy of the House
bill.
There was general agreement that
the committee would approve Presi-
dent Roosevelt's and the Treasury's
recommendation, rejected by the
House, that personal income tax
exemptions be reduced from $4,000
to t$1 500 for married persons and
from $500 to $3.50 for single individ-
uals.
Such a broadening of the income
tax base would bring about 5000, ,OOC
additional persons under the income
tax structure. For those already
paying taxes, it would mean an ad-
| oAeAoiiol PdyACue Vi dPPAOAuudICly
$50 for bottom m-bracket married per-
sons and an extra contribution OF
about IS ioI lower-bracket single
persons.
La Toilette Dissents.
One diSsenter to the current base
broadening proposal was Senator
La Toilette, Progressive, of Wiscon-
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