Evening star., 1942-09-09
TredsuryAsks
2.5.biIIion Boost
In Income Tax
Proposal Offered
As Substitute for
Victory Levy
By the Associated Press.

Bs the Associated Press
Treasury officials were report
ed to have urged the Senate
Finance Committee today to
amend the new revenue bill to
increase individual income taxes
by 81, 500 900 900 yearly instead of
writing into the measure a 5 per
cent victory" tax.
Senator Radcliffe. Democrat. OF
Maryland, said the Treasury on
cials had submitted three compli-
Gated schedules to the committee
involving lowering of present in
come tax exemptions and increases
in rates.
The plan apparently most IA
'vored by the Treasury, he said, COM
bined rate increases with a reduce
ton in exemptions to $400 for single
persons, and $500 for married
couples, with 5000 credit being
allowed for dependents.
Difficult to Administer.
The present law grants exemp-
tions of $3.50 to single persons,
s1,500 for married couples and s4oo
for dependents. The House voted
to lower those to $500 for single
persons and 81 200 for married, re-
tanning the s400 credit for depend
ents. The Senate committee had
previously voted to approve the $500
and $1,000 exemptions, but moved
to cut the dependency credit to $500.
Senator Radcliffe said Treasury
officials objected that the per cent
Victory" tax would be dificult to
administer, particularly as to pro-
visions for postwar credits and
debt deductions.
AS approved yesterday by the
committee, an extra levy of S per
cent to be collected at the source,
would be made against the earnings
of individuals above a basic exemp-
ton of 1924 year. The levy would
be calculated to raise approximately
s., 500 900, 900 yearly, of which ST.
100, 100000 would be rebated to tax
payers through credits allowed them
at the end of the year.
Is Billion in Revenue.
| In approving the tax, the commit
tee directed the Treasury to submit
today proposals for combining it
with the regular income taxes.
Senator Radcliffe said the Treas
ury plans involved no postwar re-
bate or debt credit provisions, the
full amount of collections under
! them to be retained
Committee members said that
whatever the details might be, the
net result in any event might be to
increase the Nations annual tax
yield to more than $25 ,o00, 900 900,
compared with slightly more than
$17, 900, ,000, 900 collected under pres
ent laws.
Although the committee had not
settled details of the victory tax, wage
earners who made more than Sl2 a
week probably would have per
cent withheld from their pay checks
beginning January /. Their tax
thus would be paid by the end of
the year and any credit which they
had accumulated by reason of in
surance premiums, debt retirement
or bond purchases would be trans
ferred as cash credit against their
regular income tax liability.
While the victory tax would be
collected alike from single and
married persons, the latter could
accumulate greater credits against
the tax during the year.
Credits of IS per cent of the tax
or maximum of $500, could be
accumulated by single persons for
payments they had made on life
insurance, debts incurred before
January /, 1912, or Government
bond purchases. The remainder of
the unused credit would be repre-
sented in non-negotiable, non-in-
terest bearing Government bonds
they could cash after the war.
Married persons could claim sim
liar credits up to 40 per cent of the
(See TAYEC pare A1II