Evening star., 1942-08-14
Substantial Increase
In House Tax Yield
Sought by BarkIey
Senator Calls for Bill
Providing Full Amount
Asked by Treasury
Continued From First Page.

the Army's Flying Fortress bomb
ers.
Senator Barkley's desire for the
passage of a measure which would
stand without revision for at least
several months was known to be
shared by other committee men,
bers.
Chairman George had advocated
the establishment Of tax structure
which would be adequate for the
war period with only minor changes
and Senator Byrd, Democrat, of
Virginia has proposed passage OF a
measure which would give taxpayers
a breathing SPELL from further
major alterations.
Senator Byrd advocates a retail
sales tax to obtain the $2,50O, 900 900
additional money Secretary Morgen-
thau said ought to be raised over
and above the amounts In the House
bill, but Senator Barkley expressed
doubt that Congress would approve
such a levy at this time. Both the
United States Chamber OF Com
merce and the National Association
OF Manufacturers have called for a
sales tax at recent meetings.
Mind Open on Withholding Tax.
Senator Barkley said that direct
Withholding tax on wages, interest
and dividends, similar to an income
tax collection levy placed in the
House bill, presented many difncul-
ties of administration but did not
indicate he had foreclosed his mind
against such proposal.
The committee arranged to hear
nearly q score of witnesses today in
an overflow session at which 1t
hoped to wind up its public hearings
Mr.. Bowman said the threatened
plight Of the Boeing company
which was shared by other aircraft
Manufacturers from the fact
that it had spent most Of It's earn
lngs in pre-war years to develop
new types Of equipment.
Because its invested capital was
relatively small and its earnings in
the 1886 1899 base period were low, he
said, 96.6 per cent Of its net income
would be subject to the proposed 90
per cent excess profits levy, with the
result that taxes would eat up 88.75
per cent of all its profits.
Award to Company Cited.
This meant, he declared, that the
company could not continue to oper
ate, adding:
TT is curious that I should be
here to plead for the life of this
company at time when, in Seattle
the company and its employees are
being given the Army Navy produc-
ton efficiency award"
Mr.. Bowman said low pre-war
earnings would have been higher
and thus afforded a larger basic ex-
emption from excess profits taxation
except for the fact that the Flying
Fortress" was 80 highly regarded by
the Air Corps that We were not per-
mitted to sell 1t abroad"
Prof. Fisher suggested = 5 per cent
tax on the spendings OF an individual
up to 5000 $4,000 for q married
couple), 10 per cent on the next
5000 increment for individuals (the
next $4,000 for married couples
and so on in per cent jumps until
q maximum rate Of so per cent tai
would be reached on spendings OF
$45, 900 or over for single persons OF
500, 900 or more for married couples
To compute the spendings, Prof
Fisher said gross receipts from al
sources should be totaled and Ger.
tain specific deductions subtracted
The most essential OF those deduc.
tions, he declared, would be busines,
expenses and reinvestments, taxe'
and reasonable deductions for de-
pendents.
Taxing savings and undivided
profits, Prof. Fisher said, means kill
ing the goose that lays the COLDER
egg. I'VE may thereby get littl'
more tax revenue this year, but VI
are killing revenues in future years
revenues which will be even NOR,
needed then than now" he said.