Evening star., 1941-04-20
By ]. A. OTEARY.

BY ]. A. OLEARY.
Possibility that general sales
tax may be considered along with
sharply increased income rates to
meet part of the Treasury's new
So, 500, 1000 900 revenue program be-
gan to develop in the Senate yes
terday, as the House Ways and
Means Committee prepared to con-
fer with fiscal experts tomorrow
morning.
Two Democrats, Senators Rey-
nolds of North Carolina and Clark
of Idaho, indicated they thought
some form of sales levy might well
be given consideration as well as
changes in the income structure
in the search for the required rev.
enue.
At the same time demands were
heard on the House side from Rep
resentatives Disney, Democrat, Of
Oklahoma and Woodruff, Repub-
lican, of Michigan for economies
in spending to 60 hand in hand
with any new tax bill.
Higher Income Levy Seen.
Despite the discussion of a gen.
eral sales tax. however, most Of
the speculation thus far is CENTER
ing around heavier income levies,
with a probable boost in the nor
NAL rate from 4 per cent to or 8
per cent and a widening Of the
surtax range by starting it lower
than the present $4,000 level. The
tax resulting fro mapplication of
the 4 per cent rate already is be-
ing augmented in this years re-
turns by the additional 10 per cent
defense levy voted by Congress last
year. For example, person whose
tax bill at the normal rate came
to $40, paid 81 additional under
the defense tax.
Insofar as the trend of Senate
thought is concerned, the tax prob
lem is still month or six weeks
off, since revenue legislation must
originate in the House.
Chairman Doughton of the House
committee expects to hold two
weeks of hearings. but the date of
starting has not been fixed, pend
ing the informal conferences with
the Treasury experts.
Even if a general sales tax is dis
carded again, as 1t has been on pre-
vious occasions, there are definite
indications that specific items may
be singled out to bear part of the
new burden.
Representative Doughton sug-
gested, for example. that some OF
the World War nuisance levies may
be considered for revival. -
From other sources came the sug-
gestion that some increase in the
present 1-cent Federal gasoline tax
is a possibility. For the first eight
months of the current fiscal year
the 1-cent rate has produced SUBJ
stantially more than was expected.
If the gas tax is increased it may
lead to further study Of the rates
on liquors and tobacco.
Indicating he did not think an 8
per cent normal income rate would
be too high under the circumstances,
Senator Clark of Idaho declared,
We have voted this money for
war and now we have got TO pay
for it."
Reynolds Urges Sales Tax.
Senator Reynolds recalled that
the States tried to avoid sales taxes
as long as they could. but expressed
the belief there is no longer time
for "wishful thinking" in consider
ing the revenue needs of the Fed
eral Government. 1t would be un-
fair, he said, for this generation to
leave present burdens to be met by
its children and grandchildren. For
those reasons, he said. Congress may
find 1t necessary to consider some
form of manufacturers sales tax,
along with increased income taxes
in the higher brackets.
Senator Reynolds also pointed out
that, in considering the revenue
problem Congress should not lose
sight of the domestic problems it
will have to meet when the Euro
pean war ends and industry slows
down to normal.
In addition to talk of boosting the
4 per cent normal income rate, the
suggestion was heard from one
source yesterday that consideration
might also be given to elimination
of the present 10 per cent credit on
earned income.
Corporate Tax Rate.
The field of speculation also in
cluded reports that the corporation
income tax rate might be boosted
from "a to 80 per cent.
All of these various suggestions
will remain in the speculative stage
until the impending House confer
ences with the experts lead to the
drafting of tax bill.
In stressing the advisability of
trying to economic as well as raise
taxes, Representative Disney mem
toned the $200000,0 900 Federal-aid
highway fund. postal subsidies. and
the expenses of the National Youth
Administration as items to start on.
Mr.. Disney called for some old
fashioned economy and was sup
ported by Representative Woodruff, ,
who urged cutting down expendi-
lures with long knife" Mr.. Wood
ruff suggested some savings might
be made in defense Srendino oIso