Evening star., 1942-08-13
Manufacturers Join
Chamber in BACKING
General Sales Tax
Object, However, to
Proposal to Enoct
Withholding Levy
BY the Associated Press.

| QlVlQudl income leVleS IOf war
purposes was proposed today by
j. Cheever Cowdin, spokesman
for the National Association of
Manufacturers.
The NAM program called for S37, =
200, ,000, 900 in revenue and savings in
non-War costs in 1943, q sharp in
crease over pending measures, on top
Of which was suggested consideration
OF compulsory individual savings.
The Associated State Chambers of
Commerce joined the NAM in urging
sales tax Appearing in behalf of
the State chambers, Arnold A. Baar
of Chicago recommended a retail
sales levy, 35 per cent limit on
normal and surtaX assessments on
corporations and postwar rebate
of all excess profits taxes over 80
per cent.
While urging sales tax as had
the United States Chamber of Com
merce. the NAM said a S per cent
Withholding tax on individual earn
lngs, such RS the chamber also
proposed, was Impractical and in
defensible."
Mr.. CoWdin, in recommendation
prepared for the Senate Finance
Committee, called the revenue bill
pending before it "one of the most
important single measures ever to
come before Congress" and added:
"A bad tax bill can lose the war"
Estimates Corporation Income.
Through Mr.. Cowdin the NAM
surveyed 5000 businesses and in
dustrial units and estimated cor
porations would net about $18,0OO,- =
900 900 this year.
1t proposed that the Treasury take
sl1 900 100000 in taxes and leave
approximately $4,000, ,OO0, ,OOO-or 2.7
per cent of estimated gross receipts
for dividends, reserves and addi-
tional working capital. He esti-
mated that on the same basis cor
porations would pay $l3,50O, 900 900
in 1943.
Such a total. he asserted, was
"far beyond the corporate payments
any one in Government has so far
estimated or asked for"
To make up the $37 zoe, 900 900
total in 1943, the NAM would slash
$4,000, 900 900 from non-war expendi-
lures. collect $500, ,000, 900 by the
sales levy, 50, 900, ,000, 900 in individual
income taxes at rates lower than
those now pending and obtain ST.
500 100000 from excise, employment.
customs and miscellaneous taxes not
covered in It's recommenda ton.
IT the NAM program were en-
acted it would double the 17.o00.-
100000 in revenues existing laws
were expected to produce in the cur
rent fiscal year, beginning July /.
The House bill now pending be-
fore the Senate Committee would
add 1921 ,00O, 900, its enactment
boosting estimated revenues to $23.-
271 100000 in the first full wear of
operation.
To support the plea for q sales
tax, Mr.. Cowdin pointed out "the
people in % States and two of the
largest cities comprising half the
population" already pay such taxes.
Fears Runaway Imitation.
About all the ingredients OF
runaway infla ton are with us now"
Mr.. Cowdin declared, "and We can
no longer afford to hide our heads
In the sand. We must take drastic
action.
"A sales tax will be one step in
that direction, and we urge consid-
Grafton of compulsory savings as an
additional step"
For corporations Mr.. Cowdin urged
that normal taxes be deducted be-
lore the excess profits tax is COM
puted.
Last March the NAM recon-
mended q combined normal and war
surtax Of 40 per cent and a 90 Der
cent excess profits tax.
We recommend most earnestly
that the combined normal and war
surtax not exceed 40 per cent" Mr..
CoWdin said. Since q higher rate
rs bound to cripple the many thou
sands OF companies which are not
directly engaged in the war effort"
He said he was disturbed by "a
widespread feeling on the part of
businessmen that there had crept
into the tax bill definite restrictions
on business which VOL Id change the
free system we have In this country.
The NAM representative urged
that a postwar tax credit of 10 Der
cent be established both to heIp
finance the war and to cushion
peacetime readjustment.
Postwar Cushion Asked.
Such cushion" he suggested,
could be set up by allowing COM
panies to buy Federal bonds up to.
10 per cent OF taxable net income
the money paid to be allowed as a
tax credit. Non-negotiable and nom
interest bearing. such securities
would be paid off over 4 period of
10 years following the war.
Enactment of a wartime revenue
bill of SUFFICIENT scope and perma-
nency to give taxpayers a two-year
breathing spell" was advocated
meanwhile by Senator Byrd, Demo-
crat, of Virginia.
With the committee nearing the
end of public hearings, Senator
Byrd told reporters he hoped the