Evening star., 1941-09-05
96 Million Cut
From Original
Proposals
S. Auto Levy Kept;
Measure Now Goes
To Conference
BY ]. A. O'LEARY.

Inc senate ldCe COudy passed
a $3,583, 100000 defense tax bill
and sent it to conference with
the House on changes increasing
income levies all along the line,
heavier corporation rates and
numerous increases in excise
taxes.
The vote was 81 to 5.
The final vote came unexpectedly
after leaders had sidetracked by
negotiation two controversies that
threatened to carry the debate into
next week.
First they got rid of the drive
for a more liberal old-age pension
plan by promising Senator Downey
of California the Finance Commit
tee would hold separate hearings
on it.
Then they decided to abandon
the amendment aimed at division
of family income for tax purposes
in eight community property States,
with an announcement it will be re-
vived in a later tax bill.
Auto Tax Kept In Bill.
Just before the final vote Senators
La Toilette of Wisconsin and Dana
her of Connecticut lost a close fight
to save the motorists of the country
from the new SIS Federal tax on the
use of an automobile. The tax was
kept in the bill by the narrow
margin of 35 to 80 on a roll call.
Senator La Toilette, who estimated
the levy would take another $780,
0OO,0 900 from the owners of automo-
biles annually. pointed out that it
taxes SIS jalopy and an expensive
limousine at the same rate.
IF you can defend that" he
shouted to his colleagues, take it
home and discuss 1t with your
people"
Senator La Toilette reminded the
Senate the States already tax au-
tomobiles heavily and quoted sta
tistics to show that SIS per cent of
the motor vehicles in the country
are owned by persons with incomes
of $50 week or less.
When the bill goes to conference
with the House next week chief in
tereSt will center around the ulti-
mate fate of Senate amendments
lowering personal income exemp-
tions from $4,000 to $500 for mar
ried persons and from $500 to $3.50
for single persons.
AS the bill came from committee
Tuesday it carried s3,679. 800 900, an
increase of s463, 100000 over the
House The Senate eliminated
sos, ,900,0 900 of these increases, of
which $4,000, 900 was lost when the
community property amendment
was rejected. The balance went
out when the Senate refused to
raise theater admission taxes from
10 to is per cent.
The decision to postpone the COM
munity property State fight was
reached in cloakroom conferences,
which began as soon as a previous
obstacle-the Downey old-age pen
sion amendment-had been side
tracked with promise to hold hear
ings on it as separate proposition
Senators Planned Fight.
If the community property fight
had not been dropped, all indica-
tions were that debate on the bill
would have dragged on to the mid
die of next week.
A determined group of Senators
from the eight community property
States had been prepared to carry
into next week their battle against
the Finance Committee amendment,
which sought to place those States
on a parity with the rest of the
country in the filing of income tax
| returns.
Where State law permits a divi-
sion of family property, the conf
mittee contended, husbands and
wives filing separate returns hold
an advantage over married couples
in other States. The amendmen.
would require that earned income
be reported by the party earning
| it, and unearned income by the
party controlling the property tnat
produces the income.
An effort to inject the tariff issue
into the domestic revenue raising
measure failed by vote of 80 tc
81, when the Senate turned down
an amendment by Senator Butler
Republican, of Nebraska to fix new
duties on fats and oils.
Blocks Tariff Proposals.
Chairman George of the Finance
Committee said that, though the
amendment had merit, if the dool
was opened to tariff changes there
would be 10000 similar amendment.
offered.
Senate leaders were still hopin,
for passage of the tax bill late thi
afternoon, to avoid a Saturday ses
sion, but they were not sure the,
could dispose of remaining amend
ments to be offered by individua
Senators.
Without a record vote, the Sen
ate transferred the excise tax Of
jewelry from the retailer to tn
manufacturer and changed the rat
from 10 per cent to Is per cent.
Majority Leader Barkley then in
formed the Senate every effort wi
be made to pass the bill before ad
journment this evening.
Chairman George accepted a.
amendment by Senator Guffe!
Democrat, of Pennsylvania, t
exempt from the admission tax en-
| tart ainrnerats held hv allhlic or naro