Evening star., 1941-08-11
Tax on Non.EssentiaI
Purchases Proposed
All Senate HEARING
Investment Banker
Says Income Levy Hike
Is Too Sudden
Ee the Associated Press.

A purchase tax on non-essensial
articles was suggested by the In
vestment Bankers Association today
as an alternative to stiff increases In
income taxes.
In a statement presented to the
Senate Finance Committee by Har-
court Amory of Boston, chairman of
It's Federal Taxation Committee, the
association said the tax should ex-
empt such purchases as food, rent,
gas, electricity and children's cloth
Ing. The association suggested that
a per cent tax be imposed on pur-
ehases of second category of
articles-thoSe falling between the
classification of necessities and lux
urles. A 10 per cent tax would be
paid on purchases of luxury items.
Mr.. Amory estimated such a tax,
similar to one now in operation in
Great Britain, would yield $602 300
900 in additional revenue.
The witness said that House.
approved increases in income taxes
were too sudden" and suggested
that the total increase be limited
to 40 per cent, instead of the pro-
Jected 48 per cent. This would cut
the yield from the House approved
income levies from $2,15l 100000 to
S1.603 100000, Mr. Amory estimated.
Opposes Gift Tax Increase.
The witness also suggested that
the income tax base be broadened,
that rates be increased somewhat
on incomes between $4,000 and
$4,000, that liquor and tobacco
taxes be further increased and that
estate and gift taxes be retained at
their present levels.
1T Is difficult to see why a man
should be penalized for dying in
depression or in national emer-
gency," Mr. Amory said.
j. G. Willever, first vice president
of the Western Union Telegraph Co.
appeared as spokesman for domestic
telegraph and cable companies in
urging modification of proposed in
creases in telegraph and cable taxes.
The present tax on kilograms is
8 per cent and on cablegrams 10
cents each. The House-approved bill
would impose graduated taxes be-
ginning at cents for messages
which cost between IS and so cents,
increasing to 25 cents for messages
costing between $201 and $3.50 plus
S cents for each additional so cents
or fraction of so cents.
Company estimates, Mr.. Willever
said, were that such tax means an
average increase of Isl per cent in
the levies on kilograms and a 346
per cent increase in the case of
cablegrams.
Wants Fixed Maximum.
The witness asked that the tax
on kilograms be fixed at not more
than 10 per cent and that on cable
grams at 5 per cent.
The same consideration" he said.
(which prompted omission OF tax
on freight shipments because they
are so largely made in pursuance of
business, should supplement the
plea of the telegraph carriers that
the tax on kilograms and overseas
messages shall not be unduly in
creased lest their traffic be so aft
fected that they will be unable to
function in an adequate and salts
factory manner.
1t u.s.. the. considered opinion of
the industry that the traffic will not
stand so heavy an impost and that,
if the tax is increased to the extent
proposed in this bill, there will be
further diversion of traffic to the
alrmail, which, in addition to being
heavily subsidized by the Govern
ment, is not subject to any tax"
Meanwhile, an outside limit of
S4,000,00000 was fixed for the new
tax bill today by influential men,
bers of the Senate Finance Com
tr1ittee.
Secretary of the Treasury Nor
genthau advised the committee last
week that a s5,4OO,0OO000 measure
would be necessary if the Treasury
was to attain its financing goal of
two-thirds revenue and one-third
borrowing. Accordingly Treasury
experts now are working on plans
to raise the 1926, 100000 House
approved bill by 81, ,163, 300 900.
Chairman George predicted, how
ever, that the Senate Finance Com
mittee would not add more than
s5o0,000. 900 to the House bill He
told reporters that the Senate
should pass tax measure as soon as
possible in order to save revenue
which otherwise would be lost.
The Treasury has estimated that
the Government is losing more than
$2,000,000 a day through delay in
enacting excise provisions of the
pending revenue legislation.
Senator Brown, Democrat, of
Michigan, a member of the Finance
Committee, informed reporters he
hoped the tax measure could be in
creased ito an even four billion"
Senators Brown and George agreed
that the bill could not go above that
limit without seriously upsetting the
national economy.
Il don't think We can go as far as
Secretary Morgenthau would like us
to CO." Senator Brown declared.
eve can't possibly raise s5,400, ,0o0, 900
at this session"
Fayors Broader Tax Base.
Many tax ideas we're advanced by
Finance Committee members, but
Senator George made it clear that
majority of his group would go along
with fundamental principles of the
House-approved bill. The Georgia
Senator gave straight approval,
however, to President Roosevelt's
suggestion for broadening the in
come tax base by lowering exemp-
tions from $4,000 to s1,5O0 for mar
ried persons and from $500 to $3.50
for single individuals.
Senator George suggested an in
crease in tobacco and gasoline taxes
as one method of increasing revenue.
But he added that Congress should
revamp the whole system of So
called hidden" levies at the earliest
opportunity.
The Eiy, Cot,,p, ittoc