Evening star., 1942-08-27
Move 10 Reopen
.Withho|dingTax
Loses, 1871
Senators Again Back
'Poy-os-You
5 Pct. Deduction
By J. A. O'LEARY.

The Senate Finance Commit
tee refused today, by a vote OF
Is to 7, to reconsider yesterdays
approval of the S per cent with.
holding tax in the House $6,271,-
900 900 revenue bill.
Senator Taft, Republican, of Ohio,
who sought to reopen the question,
said further effort would be made
next week to offer some plan to
avoid double taxation involved in
collecting part of 1943 taxes as .
withholding levy out of pay en-
velopes while the taxpayer also is
paying his 1912 tax in lump sums
next year.
The double taxation angle could
have been overcome by the Ruml
plan to get taxpayers on a current
basis by forgiving the 1941 tax, but
the committee rejected that yes
terday at the same time that it
approved the withholding tax.
Earlier today it was reported op-.
ponents OF the double taxation fea-
ture were offering Immediately a new
version of the Ruml tax collection
principle, coupled with the with
holding tax, but 1t developed later
that any such effort will be delayed
until next week.
Seizure Dates Set. u
Meanwhile, the committee took
steps to relieve American corpora
tions whose properties in Axis coun-
tries have been taken over by the
enemy. Because of the difficulty of
knowing when such property was
| seized, the committee adopted
rule under which the loss will be
deemed to have occurred the date
war was declared. If the property
is recovered later it would again
| figure in the tax return at that time.
A somewhat different rule was
adopted to determine the date when
such property losses occurred in the
Philippines and Netherlands Indies.
Senator Taft said he tried to
eliminate the House withholding tax
because he deems it "a complicated,
expensive and unpopular proposal
with comparatively little result in
revenue raised. ts
The withholding levy approved
by the committee would apply
primarily to payrolls. Chairman
George of the Finance Commit
tee said. Although a draft of
| the revised section had not been
completed, it was understood that
the house principle of granting
exemptions would be retained in-s
tact.
Exemptions Figured in Advance.
Under this provision, an employer
would ascertain from his employees
whether they were married or single
and how many dependents they
had. These exemptions would be,
figured and tax placed on the
amount of salary above the exemp-
ton total.
Under terms OF the House bill, $ll
weekly salary of single person
and $26 weekly salary of married
person would be exempt from with
holding. Additional exemptions of
$3.50 for each dependent would be
granted.
Before accepting the House per
cent withholding tax to start Janu-
ary /, the Senate group made q
series of changes to simplify It's coll
lection. Most important OF these
changes would:
Exempt from the withholding tax
interest on bonds, including coupon
bonds.
Exempt interest payments by
building associations, credit unions
and similar institutions that make
payments in small amounts.
Establish bracket system for
making uniform deductions from all
wage earners receiving within IS
or $40 of the same salary, to relieve
employers of the necessity of figur-
ing each workers payment down to
the last penny. = n
To Take Up Corporation Rates.
Although the committee is not
through with its review of the in
dividual income tax section of the
$6,271 10000 revenue bill, 1t was to
turn its attention back today to the
corporation rates to struggle with
the Treasury's latest proposal to al
low companies to set up an over
all reserve Of IS per cent of excess
profits net income, which would be
tax exempt If used for certain pur-
poses now or within specified
postwar period. ri
The committee laid this aside yes
terday to give the Treasury time
TO present more specific data to
show what the reserve could be used
Tor, such as deferred maintenance
and inventory depreciation.
| A postwar tax rebate patterned
after Canadas allowance of a max
imum credit of $500 yearly for single
(See TAXES, Page A-l6.) !,