Detroit evening times. (Detroit, Mich) 1921-1958, 1941-06-01
Taxation Riddle
Believed Solved
For Michigan !.
Time, stan Correspondent

Times stan Correspondent
WASHIN TON. May 81
Teamwork among Governor Van
Wagner and members of the
Michigan congressional delegation
appeared today TO have solved
fairly well-in the opinion of Mich
igan legislators-the problem pre-
scented by the governor this week
with respect % taxation OF de-
Tense plants owned, leased or
financed by the federal government
or federal agencies like the RFC
and its subsidiaries, sGch as the
Defense Plant Corporation.
Although the legislation which
threatened more than one Mlchi-
gan community with bankruptcy IS
still in conference between the
Senate and House. members OF
both bodies who are handling it
seemed ready to accept the legis-
latiye solution worked out be-
tween Senator Brown and Con-
gresham Rabaut of Detroit after
hearing from the governor.
Exemptions Listed
In bill charging the lending
power of the RFC by $3.50, 100000
and extending the life of several
other government agencies such as
the Electric Home and Farm Au-
Ithorily and Disaster Loan Corpora
/ ton. a provision appeared
ieXempting all personal property of
these agencies or corporate SUBJ
/ salaries from personal taxes.
: Governor Van Wagner pointed
out that under Michigan law even
buildings built on leased land and
industrial equipment generally are
taxable as personal property and
that the exemption carried in the
bill would be body blow to COM
munities in which the government
is financing big defense structures
or housing projects, not all OF
which are subject TO taxation.
Conferences am ong Senator
Brown. Congressman 'Rabaut and
the legislative drafting experts OF
the Senate followed. Out of them
came a simple amendment which
the House accepted and which
Senator Brown believes the Senate
will accept also.
Now REDEEMED
II reads:
"Such exemptions (from per-
sonal taxes shall not be con-
strued to be applicable in any
state to any buildings or struc--
lures which are considered by
the laws of such state TO be per-
sonal property for taxation pur-
poses"
BY thus giving its consent to
taxation Of defense projects in
such states, Congress. speaking
for the federal government, ap-
: parently is about to give the gov
r ernor and the state government
. everything they ask without nfef-
tioning Michigan by name.
The bill otherwise explicitly
sanctioned taxation of real estate
: owned by the federal agencies
named. The Michigan amendment
: brings it into line with Michigan
: law.
{ Congressman Dondero and VOL
: colt demanded that the exemption
: provision, in line with prevailing
, practice and supported by court
; decisions as well. be stricken from
} the bill. When the House refused
to do this, Chairman Steagall OF
the House banking and currency
committee accepted and persuaded
the House to accept the Rabaut-
Brown solution as quoted.
Looks for Acceptance
The senator expects to be one
OF the conferees on the bill when
the House amendments are con-
5 Sidered. He believes the Senate
{ will accept the House language.
Representative Wolcott, at first
), inclined TO question whether the
Rabaut amendment would do the
trick for Michigan, said on further
, study he thought it would.
S AS the measure stands, there
2 fore, the delegation is satisfied.
2 and the governor presumably is
also.
With the signing of the bill by
the President. if it reaches him
in its present form as now ex-
pected, the job will be done, and
many Michigan communities may
4.