Evening star., 1941-08-15
SenatorsGet
New 81 Billion
Tax Bill Plan
Two Billion Dollar
Cut in Non-Defense
Spending Urged
Earlier Story on Page A-3.)

Earlier Story on Page A-3D
A far-reaching substitute for the
pending tax bill that would improve
the Treasurys fiscal position by
Sc, 500, 900 900 in place of the House
total of s3,236,7000 was placed
before the Senate Finance Commit
tee this afternoon for the Chamber
of Commerce by Ellsworth c. AL
word.
The first step by which he
reached this higher total was 10
propose a $4,000. .0OO,0 900 cut in non-
defense spending. as suggested ear
Iier in the day by Prof. Fred r.
Fairchild, another Chamber spokes-
man.
The second step was to recon-
mend the Withholding tax upon
all compensation, dividends and in
terest paid to individuals estimat-
ed to raise another $4,000 900 900.
This would be in effect a tax on
all compensation, withheld at the
source
Urges Reasonable Basis.
Additional sales. excise or miscel-
laneous taxes. 81 1000, 100000
- On the other side of the ledger.
the Chamber urged that the in
crease in corporate and individual
income taxes be limited to 81 500
100000, whereas the House bill
raises STATS 100000 from those
sources.
The net result of these four
changes produced the revenue i'm
provement of S6,500.O00 1000.
In addition" Mr. Alvord testi-
fed, THE present unintelligible. COM
plicated inequitable revenue laws.
including both income and excise
profits taxes, should be thoroughly
revised to place them upon . rea-
sonable and equitable basis Un-
intended inequities and unexpected
interpretations must be. and can be.
corrected without consideration of
the oft-sounded objection of 'cost-to-
the Treasury"
The Chamber believes, Mr. Alvord
said that only through the above
program can the tax program be
used to control imitation and dis
tribute the burdens of defense with
reasonable equity among all. with
due recognition of the principle of
ability to pay.
Burden on Middle Class"
Under the House bill, the witness
said, the full burden of the in
crease in the individual income tax
is thrown upon the persons now
subject to income tax. and particu-
larly those in the $4,000 to $4,000
group"
This" he said, lis the so-called
middle class composed mainly of
families with fixed incomes and fixed
liabilities. The Secretary of the
Treasury admits that this group is
already being squeezed by increases
in the cost of living. Nevertheless,
instead of distributing an additional
tax burden of such tremendous pro-
portions over a large segment of the
population, it is proposed to con-
centrate it on about seven million
persons, who. with their families.
constitute about IS per cent of the
total population and about one
eighth of the gainfully employed. Is
liquidation of the middle class a
part of the plan?'
Emphasis on Small Incomes.
Benjamin M Anderson. professor
of economics at the University of
California at Los Angeles, urged the
committee TO put heavy emphasis
on the increased taxation of small
incomes, both from the standpoint
of getting revenue and of holding
down the growing income of the
people, so that they may not COM
pete too heavily with the Govern
ment in the purchase of goods.
He said he would support lowering
personal exemptions to $3.50 for sin
gle persons and to $500 for fam
lilies. They are now $500 and $4,000.
Roy c. Osgood, another Chamber
of Commerce spokesman, said he
recognized immediate repeal of the
estate tax is impractical, but rec
commended that the objective
should be toward returning this field
of taxation to the States" A step
in that direction would be a contin-
uance of present rates, he proposed
a series of amendments to estate
and gift tax provisions of the House
bill.