Evening star., 1942-08-25
Tax Rebate Plan
After War Wins
Senate Backing.
Finance Committee
Majority Fovors 1t,
BorkIey Says
By the Associated Press.

Democratic Leader Barkley
said today a majority of the SEN
ate Finance Committee appeared
inclined to revise the House tax
bill to provide for postwar re-
bates for corporations.
"It looks like there will be a post
war rebate of some kind" Senator
Barkley told reporters as the COM
mittee ended more than two hours
of discussion of corporation tax
rates In the new bill.
He added that the question of
providing for rebates for individuals
also was before the committee.
The treasury has proposed that
the 30 per cent excess profits tax
placed on corporations in the House
bill be softened by a provision for
the rebate of 10 per cent Of this
tax after the war for use by corpo-
rations In plant conversion and
expansion and other activities cal.
culated to provide employment.
individual Rates Laid Aside.
Chairman George said the COM
mittee had laid aside temporarily
its consideration of individual In.
come tax rates and debt relief pro-
posals to study business rates.
He said the committee must de.
termine what taxes it wished TO
apply on business before 1t could
decide on changes in the House.
approved individual rate schedule.
A Treasury proposal that would
permit individuals to take an income
tax credit of up to $3.50 for payments
on old debts. life insurance prem
iums or for investment In Govern.
ment bonds, was on the commit
tees agenda.
While declining to discuss details
Of the proposal, Chairman George
said the committee would dispose of
1t before taking up suggestions that
the new revenue bill be revised to
provide for collection of income
taxes on current basis.
Another member, preferred not TO
be quoted by name, said the Treas
ury had proposed an allowance Of
up to IS per cent of total income
for debt and insurance payments
or for the purchase of Government
bonds.
! Lower Bracket Relief.
| This member pointed out, how.
ever. that the $3.50 maximum sue.
fgested by the Treasury would limit
Its benefits largely to taxpayers IN
the lower brackets. He said that
an effort probably would be made
to increase the maximum credit
u the debt reduction provision u
,adopted. u-l',.
| While this proposal promised re.
lief for debt -burdened taxpayers In
the low-income class, the commit.
tee was reported studying another
suggestion that would have the ef-
feet OF increasing taxes for most
individuals - abandonment Of the
present 10 per cent credit for earned
income.
Members said Treasury onicials
estimated elimination of this credit
would add $500, 900 900 to annual
revenues, but they were not press.
ing for it. a
The committee wrote one tentative
relief provision into the bill yester-
day, voting to permit taxpayers to
charge of extraordinary medical
expenses that exceeded per cent
OF their total income. A maximum
deduction Of $2,50o would be per-
mitted, and some members said this
might subtract SITS 900 900 from po-
tential revenues. -
Offsetting this, the COMMITTEES
voted to lower from 500 to $500
the individual income tax credit for
dependents, q move calculated to
add $220, 900 900 to revenues. It de-
clined, however, to extend the pFes-
ent l8-year age limit on dependents
| A