Evening star., 1943-02-02
treasury Proposes
Withholding Tax
OF 19PerC Cent
RumI' Plan to Omit
~ Levies Opposed
= At House Hearing

: ~ IeVieS IMPOSED
= At House Hearing
tcontfnued From First Page.)
ceipts by going on q cash sales basis.
Yet no one would say that the busi-
ness had not lost assets to the extent
OF the accounts cancelled"
Higher Brackets Discussed.
As to whether an attempt should
be made to bring completely current
the tax on the incomes which ex-
tend into the higher surtax brackets,
Mr.. Paul said. 1T seems desirable
that they should be made as nearly
current as possible, subject to in
evitable adjustments which cannot
be made until the following year.
But il the compliance difficulties of
making taxes on such incomes fully
current are deemed too great. sub
stantial currency for the great ma
jority of taxpayers can be achieved
by making the basic liability cur
rent with payment Of the balance
In the same manner as the whole
tax Is collected at present, namely,
IN the following year."
: With respect to income derived
from sources other than wages and
salaries, and thus not easily adapted
to collection at the source, Mr.. Paul
said that ut seems desirable that the
tax should be based on the current
years income" but added that
further exploration may be needed
to determine whether this could be
done more simply by an annual esti-
mate in March with periodic adjust
ments,. or by quarterly statement
OF income"
Mr.. Paul said that ut seems inn
perative" that the collection at the
source system should be based on
marital and dependency exemptions
allowed under the law.
"Otherwise," he added, "the
amounts collected would be SO far
from the amounts due as to fail to
meet the objectives of collection at
source in any satisfactory manner.
Such q collection at the source sys-
tenn can readily be handled by en-
ployers."
Must File by MarJh III
] Committee members had indi-
Gated a desire to question Mr.. Paul
ana John Sullivan, Assistant Secre-
tary Of the Treasury, on the Ruml
plan and q compromise proposal by
Representative Robertson, Demo-
crat. Of Virginia to erase lo47 In
come tax obligations only In the
lower bracket, closely in line with
the Treasl,rys recommendation, bat
there was no discussion when Mr..
paul finished his lengthy statement.
Another proposal under sta,dy would
apply lsll rates 10 1oz2 Incomes IN
bringing about the pAy-as-you-go
principle.
There WAS no explanation given
of how 1t was proposed to defer 7
1917 tax liabilities, which come due
March Is but may be paid In quar-
Eerly payments. though the COM
Rittee emphasized In q formal
vtatement thdt IN Taxpayers should
make their returns March u as
usual. Il f
The noshmittee enipa4aaiEe4 . tas
3 ,oo0. 900 taxpayers that enact 4
d . pay1aS.y yol-eo. law would Not I
remove the requirements that they
Ale their 1912 returns ana pay as
least the nr9t installment by
March Is.
Mr.. Sullivan told the COMMITTEES
returns filed in January were not
half tliose or the same month last
year, though the number Of tax
able incomes had increased vastly.
Ssess Serisus Situation.
In one internal revenue district
he reported, a, 900 refurnssWers sd
In JanuaEy, 1912, and only 100 IN
thu month Just closed. and IN Al14
other 16.SD against 67ns
Unless the tAxpayeiN start Anng |
their returns insSnelli4telyy Mr. 9Ni- /
livan predicted 3 .sveFy serious : dt-
uation In the immediate days pre-
ceding March ls,swaAh thousands OF
war workers probably having to
form long lines, losing time In vital
industries. to get their returns Ia,
He emphasized that only. - days |
remained before the March Is dead
line.
The Ways and Means statena0nh
liBnilar to = Senate Finance Com |
mittee resolution. pointed out that |
In event q pAy-as-you-go law was |
enacted. forgiying all or part of |
1912 taxes, persons in the forgiven"
class and having made payment on
isl2 incomes then would have the
amount paid applied to their le43 !
obligations.
The committee emphasized that |
ts resolution was In no way prejudi- |
ciAl to any pay-as-you-go proposal. |