Evening star., 1942-08-29
Rum| May Be Heard
Aqain Next Week on
'pay-as-You-Go' Tax
Senators Likely to
Reconsider on His
Plan, George Says
Py the Associated Press.

Py the Associated Press.
Chairman George said today
the Senate Finance Committee
probably would reassess the Ruml
plan for pay-as-you-go collec-
ton of individual income taxes
before voting on a House-ap
proved provision of the new
revenue bill levying 5 per cent on
wages, interest and dividends
beginning January /.
Senator Byrd, Democrat, of vir-
ginia, said after a conference with
Senator George and Senator Clark,
Democrat, OF Missouri, that Boards
ley Ruml, chairman of the New
York Federal Reserve Bank, would
be available next week for testi-
mony before the committee II it
decides to reconsider two previous
votes rejecting his plan.
Mr.. Ruml recommended erasing
1941 income liabilities and applying
payments made this year on the
1912 income, with adjustments at
the end of the year if the tax
payers net receipts were either
more or less than his income for
1941. Payments thereafter would
be made weekly or monthly on the
current years income.
Thinks Plan Can BE Evolved.
Senator Byrd told reporters he
believed some plan could be worked
out for assessing withholding tax
to make the collections under the
Ruml plan. Senator George said
he was sure a majority of the COM
mittee wanted to study such a pro-
posal If a modified version could
be worked out.
The chairman added that despite
committee revisions, much dissatis-
faction remained with the ma
chlnery set up to collect the 5 per
cent withholding levy placed in the
bill by the House.
Affecting payrolls primarily, this
levy would require employers to
deduct 5 per cent of an employees
salary-less certain specified ex-
emptions-as payments on the en-
ploye's 1943 income tax. On March
Is, 1914, the employe would pay
the difference between what had
been collected from him by the
withholding method and the amount
OF his regular income tax.
Senator Taft, Republican, OF Ohio
said he expected the committee to
reconsider the Ruml plan next week
after voting, probably Monday, on
corporation tax rates.
The Treasury proposed a compli-
Gated new corporation schedule to
the committee yesterday, with an
overall limitation on taxation of 80
per cent of the net income of any
company. 1t suggested a postwar
rebate, debt-retirement credit of IL
per cent of tax liabilities.
Part Of Program Accepted.
The committee quickly accepted a
portion Of the Treasury's proposals
and voted to eliminate the capital
stock tax of SIPS per 1000 declared
valuation and its attendant declared
value excess profits tax.
AS explained by Finance Commit
tee members, the Treasury's new
program would work this way:
suppose corporation had $780,
QUO net income for the year and its
total tax bill was $87 900, under the
55 per cent normal and surtax rates,
plus the 80 per cent excess profits
rate.
The tax liability then would be
cut back to $4,000. OF that amount,
IL per cent or $500 would be avail
able for debt reduction or the pur-
chase OF non-negotiable Government
bonds which it could cash after the
war
If the corporation desired to use
$4,000 of this to pay on its debts, it
would have to pay $4,000 more of
It's debts with other funds to make
the total debt retirement $4,000.
since the amount of tax money used
could not exceed 40 per cent of the
actual payment.
II 1t complied with these terms,
it then could purchase $500 worth
OF bonds for postwar rebate. If it
did not retire any debt, the full So
900 would 60 into bonds.
Price Curb Plan Hailed.
With the Nations biggest tax bill
still being written, there was evil
dence OF general relief at the Cap
itol at indications President Roose-
welt would use his executive powers
rather than seek additional lerisla-
(See TAKES, Page A-3.)