Detroit evening times. (Detroit, Mich) 1921-1958, 1942-05-02
House SIdshes
Surtdx Levy ).
To Is Per Cent
Ignore Administration
Request; Near Action
on SIS, 900 Income Lid


WASHINGTON. May 2 (UP).-I
The House ways and means COM
mittee today had but two phases
of the 1912 corporation tax struc-
ture to dispose of before turning
to President Roosevelts proposal
for a SOS 900 net limit on private
incomes.
Speeding action on the $500
0O0. 900 war revenue bill, the COM
mittee late yesterday OVERRIDE
administrations recommendations
by adopting a Is per cent corpora
ton surtax instead of 81 per-
cent levy the treasury proposed.
Earlier, it adopted fiat "a per
cent tax on excess profits-3 per
cent higher than the treasury rec
commended - and voted to retain
the present normal corporate in
come tax rates which graduate
from IS per cent on earnings up
to SIS, 900 to "a per cent on income
lin excess of SOS, 900.
Further action was postponed
until Monday when the two re-
manning corporation tax issues
Twill be considered-the amount, IL
any. corporations will receive in
rebates after the war on the taxes
they now pay and whether to-
retain or repeal the declared value
capital stock tax.
ANTI DEPRESSION PLAN
There is strong sentiment in the
Icommittee to credit corporations
at least 20 per cent of the excess
profits taxes they now pay as a
back to buSineSS-aS-uSuaG' nest
egg to ward off severe postwar
depression.
Fate of the SIPS per $1,000
levy on declared value capital
which committee experts
want retained over the treasurys
lobjection-still is in doubt.
After these questions are de-
cided, the committee will take up
the Presidents suggestion that no
American be permitted to retain
more than $4,000 annually after
he settles his taxes.
Congressional opponents con-
tend the plan will work extreme
hardships on persons with heavy
insurance commitments, those COM
mitted to heavy payments on their
homes or other property. and per-
sons wishing to make large charit-
liable contributions.
RAISE OVER 2 BILLION
Treasury experts estimated that
the corporation tax program voted
by the committee will increase
taxes from these sources by some
lS2, 500, 600, 600 or $500, 900 900 below
the amount expected to have been
raised by the administrations pro-
posal
Under the committee plan, cor
porations will be required to turn
over to the treasury 40 per cent
lof their next taxable income in
1912 and "a per cent Of that part
of their income which exceeds a
fixed percentage of their invest
ment or the average of their earn
ings in the four years proceeding
start of the war.
| The Is per cent surtax, which
adds up to regular income tax of
40 per cent on most corporations.
was recommended by the ways and
means committees own staff OF
experts. The only corporations that
would not pay 40 per cent of their
taxable earnings, including excess
profits, are those earning $25, 900
or less.
SMALL FIRMS TAXES
The normal tax rates for these
smaller businesses are: up to-
SIS, 900. Is per cent; $1,000 to 500
900, II per cent; $4,000 to $685.
900 10 per cent.
Surfaces are levied principally
to obtain some yield on tax-exemptI
federal, state and municipal Sc
cruities. Most of these are ex-
tempted specifically from normal
federal taxation but are subject
to surtaXes.
The committee retained the
present formula for computing ex-
cess profits after making several
notifications.
The specific 5000 exemption,
over and above the excess profits
credit, was raised TO $4,000.
The invested capital credit, now
8 per cent on capital up to $5,000,-
900 and z per cent thereafter, was
modified as follows:
First, $5,000,000 OF capitaliza-
ton, 8 per cent; next $4,000, 900,
Z per cent; next $190,000.000, 6 per