Evening star., 1942-08-28
uxes
Continued From First Page.)

ton would pay which had earnings
sufficient to subject part of its in
come to the 80 per cent excess
profits tax.
This was looked on as a relief
provision for war-swelled corpora
tions which formerly had small
earnings or were operating on
small invested capital basis.
The committee late yesterday
struck out the 5 per cent tax i'm
posed by the House on all freight
bills, in response to the plea of Price
Administrator Leon Henderson that
such levy would interfere with the
maintenance of wartime price cell
ings. It's elimination took $171,-
100000 in estimated new revenue out
of the bill.
The committee has not heard the
last of the dispute over collec-
ton of a substantial part of
two years taxes in one year, which
will result from proposed establish
ment of the per cent Withholding
tax on pay envelopes next year,
along with lump sum payments on
1912 taxes.
Combination Plan to Come Up.
Senators who failed yesterday in
an effort to reconsider the S per cent
withholding tax in its present form
are planning to reopen the question
next week by offering combination
Of the Ruml plan and a withhold
ing tax. The Ruml plan sought to
put taxpayers on a current basis by
emitting 1941 taxes and treating tax
payments being made in this calen-
dar year as the 1912 tax. It was re-
jected 13 to when offered as a
separate. proposition. Coupled with
a Withholding tax, it would get away
from the double taxation argument.
The overall reserve allowance for
corporations was postponed several
days ago, when the committee called
on the Treasury for more detailed
information on the purposes for
which it would be available. Treas
which 1t would be available.
Although killing the freight rate
tax yesterday, the committee did not
disturb the House increase from S
to 10 per cent in the tax on passen-
ger transportation.
Betting Tax Retained.
The House tax of S per cent on
race track bets placed through the
pari-mutuel system also was re-
tanned. 1t is estimated to raise
$23 500, 900.
The committee adopted a provi-
sion yesterday permitting corpora
tions to buy their own securities be-
low par without accounting for the
difference between the purchase
price and par as profit. Under the
old law corporation could only do
this upon a showing that it was in
unsound financial condition. The
committees action drops the un-
sound condition requirement.
The committee also struck out
House provision which sought to tax
persons working in the Panama
Canal Zone and other possessions
outside Continental United States,
If their income came directly or in
directly from this country. The
committee acted after Government
of1cials pointed out it is difficult to
get workers for essential projects in
places like the Canal Zone, and that
the new tax proposal would be un-
wise at this time. The Senate COM
mittee action restores special ex-
emptions allowed by existing law
to citizens in these possessions.
Citizens Abroad Benefit.
Another provision of existing law
was restored, giving citizens of the
United States who are bona fide
residents in other countries for six
months of the year a credit for
earned income received in the
foreign country Committee men,
bers explained it Is designed to put
representatives of American in
terests in other countries on a basis
Of equality with their competitors
in those countries.
Victorious In an earlier fight
against the mandatory filing of joint
Federal income tax returns by hus-