Evening star., 1942-06-18
Consideration Seen
for Life Insurance
As Income TaxCredit
House Committee
Soon Nay Toke Up
Principle for Bill
BY OLIVER MCKEE.

The proposal to permit credit
or deduction in the war revenue bill
on income tax returns for life insur-
ance premiums paid by the individ-
ual taxpayers may soon be consid-
cred by the House Ways and Means
Committee, 1t was indicated today.
Though no action has yet been
taken, the question has been infor-
mally discussed and several COM
mittee members are reported to have
evidenced interest In the plan. Both
the committee and individual men,
bers have received many letters urg-
ing reductions for life insurance
payments.
Former Undersecretary of the
Treasury Roswell Magill, in an ad-
dress in New York City last month,
pointed out that tax credits for life
insurance premiums by encouraging
savings, would help curb imitation
and contribute to maintaining the
protection Of American families.
Represent Old Commitments.
Because of higher taxes and the
purchase of War bonds, many hold
ers of life insurance policies are
likely to find 1t difilcult to continue
payment of premiums on existing
policies, most Of which represent
commitments made long before the
entrance of the United States into
the war.
Randolph E. Paul, tax adviser to
Secretary Morgenthau, in presenting
to the Ways and Means Committee
this week the Treasury's proposal for
the imposition of a s25 900 ceiling on
individual incomes, recommended
that taxpayers in this group be al
lowed IS per cent credit for the
repayment of Indebtedness, or the
payment OF insurance premiums.
This recommendation, according to
advocates of Of the tax incentive in
surance plan, constitutes . partial
recognition by the Treasury of the
validity Of the arguments for a credit
for insurance premiums.
Legislation to permit deductions,
within certain statutory limits, of in
surance premiums from income tax
returns was urged in a resolution
approved by the New York State
Chamber of Commerce early this
month. The resolution was present.
ed by the chambers Executive Com
mittee and was accompanied by
report summarizing the arguments
for tax credits for life insurance
premiums.
Rising Living Costs Cited.
AT the present time, in order to
curb imitation, various methods are
being suggested for siphoning OF
the excess income of individuals as
a result OF war conditions" the re-
port said. 1T is well recognized that
a large percentage of taxpayers have
had no increase in income as a result
Of the war. Still, their living costs
have been substantially advanced
and their taxes increased, with more
increases to follow.
Faced with this situation, many
are having serious difficulties in
continuing payment of insurance
premiums. 1t Is. however, most de-
sirable that life insurance be main
tained by individuals in the lower
brackets Of income payments.
Life insurance reduces the de-
mand for welfare expenditures by
the Government, and its growth in
creases our economic and social sta
bility. This should fully justify
release from income taxation, after
the British method. Of q limited part
of the individuals income If used tor
life insurance to protect himself and
his family.
Anti-Infation Factor.
by Offering an incentive for carry
ing life insurance, many with in
creased incomes would be induced to
become policyholders and to devote
their increased purchasing power
to paying insurance premiums in
stead of purchasing commodities.
This would be factor in the move
ment to prevent imitation.
The President has pointed out
that the war finance program should
discourage spending and encourage
thrift. This means that the tax
policy OF the Government should