Evening star., 1942-09-08

bearing bonds for the remainder.
He could cash these bonds In INSTALL
ments after the war.
War bonds, of course, bear inter-
est and are cashable within a short
period after their purchase and thus
are more attractive than these other
bonds.
George explained the debt and
life insurance provisions were in
cluded to afford some relief to tax
payers with fixed obligations, ex-
penditures which did not conflict
with the war effort or affect the
imitation problem.
Planned for January 1.
He explained that the current
debt, war bond and insurance credit
would not reduce the amount orig
| inaly withheld at the source, but
would be figured only when the tax
payer computed his total victory"
tax liability at the end of the year
and included it in an enlarged re-
turn on his regular income tax.
The question of applying the
victory tax to 1912 income still was
unsettled, Senator George said, add
ing that it probably would not
become effective until January ! If
the committee approved it.
AS he outlined the plan, the 5 per
cent levy would apply to salaries
and other compensation for personal
services, dividends, interest, rents
and royalties, annuities, net profit
from business or profession and in
come from partnerships. fiduciary
earnings land other income includ-
ihle in gross income"
Senator George said he had at
tempted to simplify the source col
lection of this tax by the fiat 1924
yearly exemption for everyone, since
employers thus would take stated
amounts from the pay checks of all
employees without reference to their
marital status.
| The spending tax system was sub
mitted to the committee personally
last Thursday by Secretary Morgen-
| thau.
| UuLnne OF proposal.
AS outlined to the committee at
that time, the program called for
a 10 per cent levy on all of the
money spent by single persons who
earned more than $500 year and
married persons with more than
$1,000 income. Married couples
would be given an additional $3.50
credit for each dependent.
This 10 per cent, which was to
be in the form of enforced savings,
was calculated to yield s4,500 600, 600
yearly, all of which would have
been paid back to taxpayers after
the war.
In addition, the Treasury pro-
posed graduated tax ranging from
10 to rs per cent on luxury" spend
ing above specified exemptions, the
amount thus collected yearly to be
retained as direct tax.
Entire Proposal Rejected.
This latter tax, combined with
| reduction in income tax exemp-
tions, was calculated to yield about
$4,000, 100000 in direct new taxes
yearly
Senator Byrd, Democrat. of Vir-
ginia said the entire program was
rejected, including the Treasury
proposed reductions in regular in
come tax exemptions.
Meanwhile, Chairman George told
reporters the committee was dete-
mined to make final decisions al
once on the schedules applied te
individuals so that it could wind ut
work on the new revenue bill thi.
week and get the revised House
measure before the Senate on Sep.
tember 81.
Committee m m bers generally
were agreed, he said, that the mea.
sure's yield ought to be increased by
$4,000 100000 or $4,000, 900 900 above
the $6,271 ,000, 900 in new taxes votee
by the House.
Since the committee already has
cut $1,000 100000 from the House
figure by revising corporation taxes
Senator George said 1t was apparent
that some new form of tax would
have tn ha devised