Evening star., 1943-10-11
House Approves
Credits in 1914
On Victory Tax
Effort for Outright
Repeal Of Levy
Is Held Likely
BY the Associated Press.

BY the Associated Press.
Refund through immediate tax
credits of portion of the per
cent Victory tax, ranging from
rs to 40 per cent, was voted by
the House today without a dis
senting voice and sent to the
Senate.
The action was regarded by some
tax authorities as a forerunner of
an effort for outright repeal of the
Victory tax. The Treasury has pro-
posed that this levy be integrated
with higher income tax rates.
Under the measure passed today
the Government would assume that
all Victory taxpayers had made the
necessary War bond purchases. pay
ments on insurance and debts neces-
sary to qualify them for the credit.
Therefore. in the next tax returns
all taxpayers would take the credit
that originally was intended as a
/ postwar refund.
Credits Under Bill.
The credit amounts to 25 per cent
! for single persons. 40 per cent for
married persons, per cent for each
dependent, with the rebate in no
case to exceed 81 900.
The House also passed and sent to
the Senate bills providing for extern
| sion of time for filing for relief under
the excess profits law and removing
/ for the duration of the war the duty
on ship repairs done and equipment
installed in foreign ports.
Meanwhile, opposition to the ad-
ministration's s10.5OOO 100000 tax
| program and agitation for a 10 per
cent retail sales tax were growing.
Representative Robertson Demo-
crat, of Virginia announced he would
urge the Ways and Means Com
mlttee, of which he is member, to
, adopt the sales levy as a substitute
! for the administration program,
which envisages higher tax rates on
individual and corporate income and
on so-called luxury items, such as
liquor and tobacco.
! The Virginian was the first COM
mittee member to declare himself
publicity for this levy.
advantages" Listed.
! Mr.. Robertson listed ADVANTAGES"
Of 10 per cent sales tax as follows:
Il. It would produce an addi-
tipnal $4,000 900, 900 of much-needed
revenue.
'"2. Permit present income tax
exemptions to be raised instead of
lowered, thus simplifying the entire
tax structure.
3. 1t would afford a convenient
and fair method for all to contribute
to war financing while being no
substitute for the ability to- pay pro-
gram embodied in the income tax
/ laws.
/ a. Since sales tax is regressive,
by which we mean it tends to re-
/ strict consumption, it is a device
/ that should be employed when there
is an inf1ationary money gap of
$50 1000 100000 or more dollars be-
tween purchasing power and avail
able goods at present prices.
Economy Option.
IS. Since sales tax is a tax on
spending it affords to the TAXPAYER
some economy option not afforded
/ by an income tax.
/ "6 A sales tax has the virtue Of
simplicity, plus full current
/ collection
! u. We have modified one-half
OF our productive capacity for war
which leaves one-half for consumer
production. The Treasury income
tax proposals will reach primarily
| money that would go into savings
and ultimately into enlarged pro-
/ ductlon, while sales tax will reach
the money to be actually spent on
the purchase of goods. The Treas
ury tax proposals would dry up gifts
/ to charity. A sales tax would not.
g. The very quality that makes
general sales tax politically
unpopular is its highest attribute in
! the period of grave war emergency
/ it reaches everyone and can be
evaded by no one.
-. Since the Ways and Means
Committee will not accept the Treas
ury plan, the alternative to a sales
tax is further increase in the cost
of living"
Cool to Victory Tax Replacement.
Representative Knutson of Minne-
sofa said he and his Republican COL
leagues on the Ways and Means
Committee 'wosld be very reluctant
to replace the Victory tax with the
sales tax
But, If the necessities of the war
require it, he told newspapermen.
we, of course, have no alternative"
Representative Taber of New York,
ranking Republican on the House
Appropriations Committee, was one
OF the first to advocate a sales levy
as a substitute for the administra-
ton program.
A vigorous protest against ths
| Treasury proposal to raise the Fed
eral tax on travel from 10 to 25 per
cent was made to the committee by
r. " Fletcher vice president of the
Association of American Railroads.
He testified the rate proposed was
wv lliSl anu WUulQ lGll QSdNllY
"on fathers. mothers and wives 60
ing to see their loved ones for what
may be the last time
Explaining that he was giving his
| individual opinion Mr.. Fletcher
said the big increase on passenger
fares would fall upon the class OF
people least able to bear the ex-
pense"
Vinson Opposes Sales Tax.
Fred M. Vinson. economic stabili-
zation director, has opposed the idea
OF sales tax. saying it would raise
living costs by per cent and create
demand for wage and price in
| creaSeS.
The National Lawyers Guild. In
statement addressed to Chairman
Doughton Of the Ways and Means
Committee. called on the American