Evening star., 1943-01-31
SUNDAY STAR, WASHINGTON D. c., JANUARY 81, 1s4s
Treasury Approves
70 Pct. Withholding
Levy, Capitol Hears
Officials to Testify
As House Committee
Hearings Stort Tuesday
ry the Associated Press.

Ey the Associated Press.
Well-informed Congressional quar-
ters said yesterday that the Treas
ury looked with favor on a compro-
mise for the Ruml pay-as-you-go
plan proposed by Representative
Robertson. Democrat. of Virginia,
which would erase 1912 personnel in
come tax obligations in the lower
brackets and impose a 20 per cent
withholding levy on net taxable in
come for current collection purposes.
Treasury officials will unfold their
suggestions formally Tuesday when
the House Ways and Means Commit
tee opens public hearings on pay-as.
you-go proposals which might effect
10000 900 taxpayers.
The plan advanced by Beardsley
Ruml, chairman of the New York
Federal Reserve Bank, and embraced
in a bill introduced by Representa-
tive Carlson. Republican of Kansas,
proposes to skip all 1912 personal in
come obligations in moving the tax
clock one year forward-that is, 1943
taxes would be paid currently
through weekly, bi-weekly or monthly
deductions from earnings, instead of
falling due March Is, 1914
Drop in Returns Alarms.
Both Representatives Robertson
and Carlson. members of the Ways
and Means Committee, reemphasized
that adoption of either the Ruml,
the compromise or any other cur
rent payment plan would not remove
the requirement for the millions of
income tax papers to file their 1912
returns by March Is. A falling off
of returns thus far this year as COM
pared with last January, apparently
traceable to discussions of possible
excusing of 1912 taxes, has caused
serious concern at the Treasury.
Entirely separate from the with
holding levy. Representative Rob-
ertson has suggested 10 per cent
compulsory savings tax against net
incomes. also understood to be re-
garded favorably by the Treasury.
The 20 per cent withholding from
income after allowable deductions
would not be additional tax, but a
collection at the source from wages
salaries. interest and dividends. for
accumulation against actual taxes
as determined when each individual
files his return after the years end.
The separate 10 per cent compul-
sorry savings would 60 into War
bonds, payable to the savers.
Denies Soak Rich" Plan.
Representative Robertson's COM
promise would forgive both small
and large taxpayers the normal
per cent and the first bracket sur
tax of 13 per cent on 1912 obliga
tions. He said 1t was not soak
the rich proposition, adding:
IF that amount of the 1912 liza
bility 19 per cent? be eliminated
all taxpayers would be treated
alike"
The large income groups would
be required to pay 1912 taxes levied
for the higher brackets OF income
after having the first 10 per cent
excused f'f'"+i -
The Virginian emphasized that il
his plan is adopted. any payments
already made on 1912 personal IN
come taxes for the normal and lower
bracket assessments would be cred
tied to the current l943 obligation.
A withholding tax of 20 per cent
not upon gross but upon net taxable
income, he contended, would extenc
the Ruml plan to 80 per cent of the
taxpayers. He said he knew of nj
way, even with the full Ruml plan
TO convert all taxpayers to a cur.
rent basis, especially those with nj
predetermined earnings, such as pro.
fessional men, businessmen anc
farmers.
ClO Head Opposes Ruml Plan.
Under this compromise plan,
Representative Robertson concluded
Those in the high income bracket.
who are not made fully current will
continue as at present to pay ir
the subsequent year the balance OF
what is not collected at the source
in the current year. and there viii
be no pyramiding of tax liabilitie.
in any one year"
President Philip Murray expressed
the opposition of the CIO to thu
Ruml plan in a letter to Chairman
Doughton, Democrat, of North Caro-.
lima, Of the Ways and Means Com.
mittee, saying that it would NEAR
In future years heavy gains for tht
highest income bracket - particu.
larly those which have benefited
most from the swollen war profit.
OF 1912"
He wrote that "the millions O,
new taxpayers in the ranks of labor
will welcome program that light.
ems their burden of tax payment.
by spreading the obligation out ovel
the entire year. They will oppose
any program which couples witt
this a. series OF windfalls to larg,
incomes at the expense of the ma.
! tional Treasury"