Evening star., 1942-03-12
axes
Continued From First Page.)

and maintain higher production.
Out of the six billion dollars estt
mated to remain after taxes, only
about half can be reasonably ex-
pected to be paid to stockholders"
While the N. A. M. proposed a
| 80 per cent excess profits tax. 1t
asked at the same time for a num-
Der OF major changes in the method
Of computing that levy. One would
eliminate the present per cent re-
duction In the average earnings base
and another would allow the use Of
any three OF the four years from
| 1886 to 1889 in establishing base
period earnings.
The Treasury recommended q
| doubling of moderate income indi-
vidual income taxes by eliminating
the present 10 per cent earned in
come credit In computing the nor
NAL tax and starting surtaxes at IL
per cent on the first $500 Of net in
come.
AS an alternative, the N. A. M
proposed individual income surtax
rates beginning at per cent on the
first $500 of taxable net income
and ranging up to 79 per cent for
net income of $5000,0O0 and over.
The Treasury's proposed rate at
that high level would be 86 per
cent.
| Burden on Masses.
Speaking Of the Treasury's indi-
vidual income levies, Mr.. Cowdin
said:
I'VE believe that the proposed new
burdens are made unnecessarily dif-
flcult for the great mass of American
people who are In the income
brackets below 5000 a year.
I'VE realize that about rs per cent
Of the country's income is received
by that group earning up to IS 900
| per year, but after most careful in
yestigation and in view of other
recommendations We have to make,
We feel that the rates here suggested
are the maximum immediate in
crease those individuals can stand.
Alternative Tax Schedules.
Mr.. Cowdin proposed these alter
native sales tax schedules:
l. A 4 per cent manufacturers
tax, imposed at the point Of final
sale, together with per cent war
tax on general consumption at the
point of final sale. or:
2. An 8 per cent war tax on gen.
eral consumption at the point Of
final sale.
The first combination would yield
81, 400, 900 900 and the second $4,800,-
o00, 900, he said.
Wouldn't Bring Imitation.
"Of course" he said, I'VE recog-
nized that tax on consumption
would add to the cost Of goods. But
this in itself cannot bring about in
flation. If you will pardon the Ian
guage, we need only some plain old
fashioned American CUTS to stop in
fiation before 1t really gets under
way.
I'VE can do this by putting a
ceiling-at whatever point this cell
ing may be-on the prices OF agri-
| CUlOuI al pl OduCto, AIdilQldC Uul Gu
goods, labor. commodities and rents
The association also disagreed
with the Treasury's suggestions that
Congress start taxing the interest
on State and municipal and local
securities and for compelling joint
individual income tax returns by
husbands and wives.
1t strongly Endorsed many recon-
mendations for economies in non
essential Federal expenditures
Randolph E. Paul, Treasury tax
adviser, told the committee the
Treasury opposed an N. A. M. pro-
posal to tax capital gains a fiat 10
per cent.
The plan would give special tax
favors to "a relatively small group
OF taxpayers in the high income
brackets" he asserted. would en-
courage speculation. increase oppor-
tunities for tax avoidance and re-
| Lyca - rauaNuas