Evening star., 1943-03-02
RumI Plan Backers
Seek 10 Take Issue
10 House Floor
Subcommittee Approves
Withholding Levy,
Effective July !
By the Associated Press.

EffectIve July
By the Associated Press.
Congressional "Ruml plan"
hackers planned today to tie a
"skip-a- -tax-year" provision onto
legislation imposing a 20 per
cent withholding levy against the
taxable income of more than
30,000,000 persons earning wages
and salaries.
A house Ways and Means Sub
committee approved the withholding
levy yesterday. effective July l, as
a means of weekly, semi-monthly
or monthly deductions from pay
envelopes and checks. The levy
would not be an additional tax. but
sums collected through it would be
applied to actual taxes as they are
now computed. The 20 per cent
would include the Victory tax, which
already is being withheld.
Under this or any other plan that
Congress may approve, all taxpayers
still must pay at least the first two
installments of their 1912 income
taxes, due March Is and June IS.
Doughton Is Back.
Chairman Doughton of the full
Ways and Means Committee, return
ing from weeks rest at Naval Hos
pital, said the withholding levy
might be about as good as we can
do now" indicating indefinate post
ponement of final action on the
proposal by Beardsley Ruml to can
Gel out one income tax year.
Ruml plan supporters had other
Ideas, however, passing word along
privately that they would take their
fight to the House floor.
The subcommittee by-passed the
tax forgiveness" issue completely
for the time being, Chairman Cooper
telling newspapermen it was not de-
cided yet whether the withholdings
In the last six months of this year
would be applied to 1912 or 1943 tax
obligations.
Considerable sentiment was evi-
dent in the full committee for the
imposition of the withholding levy
and applying its collections against
taxes computed on the basis of in
come IN the previous year, as
taxes now are determined, and pass.
Ing over completely the proposals
to cancel out all or part of tax
year. Mr.. Ruml has proposed that
1943 tax collections be against 1943
income. .,
Mr.. Cooper announced the sub
committees withholding action as
follows:
ut has been tentatively agreed by
the subcommittee to provide, be-
ginning July l, 1943, withholding
tax Of 20 per cent-3 per cent on
wages and salaries above exemptions
Of 1924 like the Victory tax, plus II
per cent on wages and salaries above
regular income tax exemptions of |
$500 for single and 81 200 for mar
ried persons. plus $3.50 for each de-
pendent, increased by 10 per cent to
allow for deductions This would |
apply to wages and salaries"
Mr.. Cooper estimated the 20 per
cent levy would put approximately
70 per cent Of Americas 44,000, 900
individual income taxpayers on Z |
virtually complete current collection
basis. He stressed that the with |
holding levy would make no revision
whatever In the present tax rates
and exemptions, and would not
change any persons tax obligation |
for 1912, 1943 or any other year. but
merely would set up system for de-
ductions from wages and salaries
Tor accumulation against actual
taxes to be computed at the year
end.
By these withholdings the Govern
ment would do for the individual
taxpayer what he could do for him.
self If he divided his years income
tax obligations by the number of |
pay envelopes or salary checks he
received annually and set aside a |
certain amount from each, by which
to pay his income taxes.
The withholding system is ex-
pected to have the effect of can
ceiling out collections after July l |
Of 40 per cent OF the present victory
tax which now amounts to q loan
to the Government in that 1t is
refundable to the taxpayer.
BY the exemptions set up for the
Withholding system, the II per cent
Is calculated to yield approximately
the same amount as the 6 per cent
normal and 13 per cent first bracket
surtax against income under the ex-
emptions in the current revenue law