Evening star., 1943-02-03
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attaining q current payment basis,
the Treasury omcial indicated the
administration might support skip
ping Of 1912 taxes In the lower
bracket.
Some Ways and Means Commit
tee members are advocating the
abatement Of last years 8 per cent
normal and 13 per cent flrst bracket
surtax. to accomplish transition to
pay-as-you-go. The f1rst bracket In
cludes $4,000 Of net taxable income.
Fears Free Spending.
Mr.. Paul testified that outright
forgiveness would result In many
persons, who have saved against
taxes, feeling free to spend such
savings, thus contributing to infia-
ton.
In answer to questions, he en-
phasized that q withholding tax
was not m increased tax, but 4
method Of accllmulating funds, from
weekly or monthly deductions from
wages and salaries, atainsts actual
taxes as determined after the year
end.
Mr.. Paul told the committee:
1T should be noted. that the
President Ii his budget message
asked that collections for the fiscal
year 1914 be increased BY $16,o00,- :
0O0,O0 (through taxes and COM
pulsory loans to the 0overnment)
Practically al Of this $l6. .000. .000, 900
increase In collections will have to
be derived from individuals In the
nnN analysis. whatever. form the
] levies. may t4ke., !.
Revenue measures to meet the
PresidentS request would take from
individuals IN the fiscal year 1914 m
additional amount larger than the
tota expected 1888 inc01deyaxes ct
present rates. Clearly, cerfyine the
Presidents budget m0a699o into ef-
feet win mean partial Or complete
doubling Of payments for individual
taxpayers generally @
H0&e 09vl0RU Cato0e
On the other hand. he told the
committee, Americans now. are &C.
cumulating savings ct. q rate a.
$25, 900. .0oo. 900 to S30. 600 900 ooo an
nually, m unprecedented figure. He
estimated that individual income
taxes for le42 should yield t1o.-
000, ,000. 900 OF the ~, ,0o0, 900 900 ex-
pected from all Federal tax and
compulsory savings sources, on the
basis Of present law.
Meanwhile, the congressional
drive to put the Nations 4A,O0o, 900
income taxpayers on . pay-as-you-
60 basis In time to head Oh .
threatened breakdown in tax coll
lections pointed up to one chal-
lenging question: Whether to wipe
out all, part or nome Of 1042 tax
obligations.
10l2 Returns Must BE Flied.
The Ways and Means Committee
has joined the Treasury In an
effort to impress on taxpayers that,
regardless Of what current basis plan
Is enacted. they must file their 1917
tax returns and pay an installment
Of at least one-fourth by March is,
as required by law.
John Sullivan, Assistant Secretary
Of the Treasury. told the committee
yesterday . serious situation had
developed because Of public con-
fusion over pay-as-you-go discus
sions, with many taxpayers believ-
ing that their 1912 taxes would be
forgiven and that there would be no
need to file returns.
He said returns filed In. January
were fewer than half those checked
IN during the same month last year,
and expressed fear that in the days
Immediately preceding March is
thousands Of war workers would be
forced to leave their jobs to stand
In tax-paying lines.
Rebates for Overpayments.
The committee adopted q resolu-
ton emphasizing that on enact
ment Of pay-as-you-go law, even
If all or part of the 1912 taxes are
skipped, persons having made pay
ments would have the amount ap-
piled to their l943 obligations.
Mr.. Paul told the committee q
current t-baSis system should be ap-
piled at the latest by July /.
Thus, taxpayers would have re-
mitted two installments on their
1942 incomes. prior to effectiveness
Of a withholding levy, If such Is
written into law; and at the year
end the regular return would be
filed. II persons withholding
were more than his tax, he would
get . rebate; II less, he would pay
the balance due. Most would be ex.
j pected to come out about even.