Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-03-09
House Unit Seen
Ready 10 Vote
Withholding Tax
Ways Meons Group
Scraps RumI Plans;
May Deduct 20oo
Earlier Story on Page AID

NEdTIleT StOry on rage ALI
By the Associated Press.
A number of House Ways and
Means Committeeman, perhaps
a majority, appeared ready late
today to vote for continuation of
the present Federal income tax
system; without any tax abate-
ment, but with 20 per cent de-
ductions-Weekly, semi-monthly
or neutrality-suspicious. the taxable
portions of pay envelopes and
salary checks.
That would mean that Americas
100000 income taxpayers would
continue paying in one year taxes
computed on the basis of income in
the previous year, but wage and
salary earners would remit through
the 20 per cent withholding levy.
Compromises Rejected.
Earlier the committee rejected two
compromise proposals to the Ruml
plan calling for abatement of 1912
tax liability.
A substantial number of the IS
Democrats on the 25-member COM
mlttee were reported to have agreed
on this plan before the committee
went into It's afternoon session,
though similar proposal was re-
Jected yesterday. Is to II.
1t was understood the committee
was considering as part of this
plan the Australian system of grant
ing script to taxpayers equal to the
amount of wage or salary deduc-
tons each pay period. Such script
would be obtained from the Gov
eminent by employers and would be
used by employees to show at any
time the amount of taxes they had
paid under the withholding system.
How New Plan Would Work.
The withholding'levy would not be
an additional tax, but collections
under it would be applied to actual
taxes computed under existing rates
and exemptions. -
Under such a compromise system
| it was assumed taxpayers would re-
nit on the first two quarters OF
their 1912 taxes as usual on March
IS and June Is and beginning july
l wage and salary earner-which
make up 10 per cent of the tax
| payers-would begin renting on
the remaining half Of 1912 through
deductions from pay envelopes and
salary checks.
Prospect of the adoption Of plan
maintaining the present income tax
system, but with the withholding
levy, developed after the committee
rejected the two alternate plans.
They were:
l. By Representative Robertson,
Democrat, of Virginia, to abate the
per cent normal and first bracket
! 10 per cent surtax on the first $4,000
of 1912 income for all taxpayers.
This would erase completely the
1912 Federal income tax obligations
| for 10 per cent Of the taxpayers: 80
per cent of taxpayers then would
be put on current payment basis
through Withholding tax to be
deducted from earnings. The 10
per cent in the higher income brack-
cts would continue paying their
taxes as usual.
2. BY Chairman Doughton, to ap-
ply the much softer l941 rates and
exemptions to 1912 income and let
the taxpayers amortize the remain-
ing 1912 obligation over a relatively
short period of time while stimuli.
| taneously renting on taxes for the
current year. This would wipe OUT
the 1912 tax altogether for a large
number Of persons and reduce the
obligation for others.
/ Regardless of what action the
committee takes, it was certain that
advocates Of the plan by Beardsley
Ruml New York banker, embraced
IN bill by Representative Carlson,
Republican, of Kansas, would carry
their battle for full years abate-
ment to the House floor.