Evening star., 1942-04-22
House Group Starts
Work on Tax Bill;
SdlesleVForeeast
Proposals for Higher
Corporation Returns
To Come Up First
~ the Associated Press

e me As&oclsgd Press
With an anxious eye on the
White House. the House Ways
and Means Committee started
work today on a new tax bill
which many House members said
likely would contain some form
of general sales tax.
President Roosevelt plans TO send
a message to Congress next week
discussing means Of retarding the
rise in living costs and. informed
sources said, the necessity OF con-
trolling unusual excess profits in
war industries
Program Still Indefinite.
Members said that until the mes
sage is received. they would not
know definitely whether they would
be expected to use as base for the
bill the $3.50 1000, 900 tax recon-
mendations of Secretary Morgen-
thau on which seven weeks of hear
ings were concluded last week
As advance speculation on the
nature OF the program spread over
wide range Of possibilities, White
House Secretary Stephen Early told
a press conference today that he
did not believe any portion of the
program has yet reached a point
Of final determination.
In order that he may have suffi-
cient time to complete his message
to the Congress and his anticipated
radio address to the Nation, PreSi-
dent Roosevelt has directed that
his appointments for the remainder
of the week and the week end be
on strict must" basis.
Corporation Tax Is Up First.
Despite lack of concrete recon-
mandations, Ways and Means Com
mittee decided to adhere to its plan
of starting work today, taking up
first the Treasury Departments re-
quest for $4,000, ,000, 900 in new reve-
nue. for corporations chiefly by add
ing 81 per cent surtax to the pres
ent "a per cent normal tax, then in
crease excess profits rates Is per-
centage points above the present
scale of IS to so per cent
Congress moved a step closer to
writing a profit limitation formula
of It's own yesterday when the House
passed and sent to the Senate s19,-
900 100000 war appropriation bill
carrying rider giving the War and
Navy Departments and the Maritime
Commission authority to renegotiate
war contracts in which profits were
found to be excessive.
Mr.. Morgenthau also recommend
ed that individuals be required to
pay 100000, 900 more in taxes, a
burden that would fall most heavily
on the middle-income brackets, and
that excise levies be increased by
$1,340, ,000, 900.
Several members predicted pri-
vately that the committee would
ind 1t could not equitably follow
those proposals 100 per cent, al
though the same general tax sources
might continue to be tapped.
Sales Tax Seen Necessary.
When we get through, we will
probably find that we will have only
a $4,000 000, 600 or perhaps $6,000.-
100000 bill; then it will be a oues-
ton of whether we will have to go
to sales tax to make up the differ
ence," one influential member said
A survey showed that most of
the members favored a sales tax,
but there was little agreement on
its form. Some preferred a manu-
facturers' levy, to avoid the rela-
lively high cost of administering a
retail tax. Others favored the lat
ter type to avoid 'pyramiding" of
a tax on manufacturers by the time
the article reached the consumer.
The Treasury Department, which
has opposed either form, neverthe-
less estimated for the committee
that a 5 per cent retail tax on all
commodities except war, Federal
and State purchases, would yield
So, ,469, ,000, 900.
Chairman May of the House
Military Affairs Committee intro
duced legislation yesterday to allow
the President to fix prices. license
industry and draft all the Nations
man power during the war.