Evening star., 1942-07-20
Corporation Tax
Rates Altered
By House Group
Lust-Minute Change
Made as Bill Neors
Final Vote
By the Associated Press.

The House Ways and Means
Committee, in a last-minute
change of attitude, decided today
to recommend to the House a
80 per cent excess profits tax and
a 40 per cent combined normal
and surtax on corporations.
Shortly before the S6,143,9OO 900
revenue bill came before the House
for final passage Chairman Dough-
ton OF the committee announced
that it had abandoned it's previous
schedules of 87h2 per cent on excess
profits and As per cent on normal
and turtaxes for corporations.
Representative Knutson, Republi-
can, OF Minnesota, committee
member who had served notice he
would make an attempt on the floor
to obtain the 80 and 40 per cent
rates, said the committees new rates
were satisfactory to him.
No Action on Postwar Credits.
The committee took no action on
the question of postwar credits for
corporations based on their excess
profits taxes-a provision once ap-
proved but later discarded.
Mr.. Doughton expressed the opin-
Ion that these last-minute changes
would make little difference in the
Dllls total revenue, but that "in the
long run. our changes will increase
revenue because they will let cor
poratlons continue to live and that
Will mean more employment and
more dividends"
Committee members said the new
corporation proposals, embodied in
an amendment, were approved by a
vote OF 13 to 9. A previous attempt
IN the committee to do the same
thing failed by tie vote.
While members said they could
not forecast accurately the change
in yield, Representative Cooper,
Democrat, OF Tennessee told the
House Saturday that the changes
would mean loss of at least $780,
100000.
Bill Heaviest in History.
The heaviest tax bill in history.
estimated to boost Federal taxes to
the unprecedented level of $4,000
O0O,0 900, seemed assured of passage
during the day and speedy trans
mission to the Senate, where Chair
man George of the Finance Commit
tee has arranged to open hearings
Thursday.
AS soon as the tax bill is out of
the way, Chairman Cannon of the
House Appropriations Committee
plans to call up the conference
report on the 81, ,857 ,O00, 900 catch-aE
appropriation bill that contains
s12o, 600 900 for the Office of Price
The measure is
expected to receive final approval
by tomorrow.
The tax measure would take $19
OF each 500 of taxable income of
individuals in the lowest brackets
and $40 Of each $100 of the taxable
income Of corporations, plus 80
per cent of their so-called excess
profits"
Here are principal provisions of
the bill:
Individuals.
Present normal income tax in
creased from to per cent and sur
taxes, which now range from 6 to
II per cent, boosted to from 13 to 80
per cent, with the top brackett of 80
per cent affecting net incomes over
5000, ,0OO
Personal exemptions reduced from
81 500 to $1,000 for married couples
and from $3.50 to $500 for single
persons.
Collection OF individual income
taxes at the sources beginning in
January at the rate of per cent
Of the difference between the amount
OF each pay check or pay envelope
and personal exemptions plus de-
ductions for the pay period. The
rate would be 10 per cent in 1914,
All "withholdings" would apply
against the next years tax bill.
Estimated yield from individuals,
81, ,906 100000.
Corporations.
TIeSeIlL graduated excess profits |
tax OF IS to so per cent replaced by
fiat 80 per cent, with the specific |
to which all corporations
are entitled raised from $1,000 to
10000.
On that part of income not sub
ject to excess profits taxes, "a per
cent normal and Is per cent surtax
would be imposed on corporations
with earnings in excess of $25 1000.
Present rates are "a and 7.
Estimated yield, $2,479>4OO 900.
Miscellaneous.
Increased excise taxes on liquor,
beer, wines, cigarettes, smoking to-
bacco, cigars, lubricating oil, photo
graphic apparatus. telephone and
telegraph bills, train, bus, plane and
other transportation fares, and new
taxes on freight and express ship
ments and on pari-mutuel bets.
Estimated yield, $758, 100000
Conferees on the $685., ,00O, 900 ap-