The Waterbury Democrat., 1944-03-17
Congress Sympathetic
 To Post-War Changes
Business Leaders Must Unite in Obtaining Simpica- tiOn of Tax System Declares Davidson at Meeting

Planning, Inc, declared at the 74th quarterly meeting of the New Eng land Council held here at the Hotel Taft.
 Currently, Congress is sympa- thetic to certain changes being made immediately after the war;" the nationally known economist and advisor to industry management said. 'These changes must have the united support of our leaders If they are to be enacted into law" However, MT. Davidson believes there is no immediate hope of tax reductions this year, and declared business is responsible for the complications and abSurditieS in the excess profit tax.
 "A united business in 194l would have resulted in the adoption of a Treasury recommendation of an al- ternate plan which taxed corporate income distributed in dividends at a lower rate than the income accum- ulated, thus eliminating the excess profit tax completely" he declared
 Changes now being studied by Congress include the outright re- peal of the excess profits tax, along with a national tax budget not to exceed $20 billion, of which corpora tions will provide from four to six billion.
 T can see but little chance of re- ducink normal and Surtax rates unless such reduction applies only to income distributed in taxable di- vidends," MT. Davidson declared. T do feel. however, that consolidation and simpliflcation of declared value and excess profits tax D probable"
 Revision of the capital gains pro- vision due to fear that the present six months period provides oppor- tunity for tax avoidance, was pre- dicted by the speaker.
 The speaker urged the New Eng land Council to work for three ad- ministrative changes affecting corp orationS to be included in this years tax bill. The 10 per cent post war refund should be made avail able when contracts are cancelled, MT. Davidson pointed out, instead of upon the official cessation of hos tilities which may be at least two years after the shooting stops.
 He also advocated that the car- ry-back provisions be changed to an operative position whenever it ap- peared that corporation would op- crate at loss instead of recurring refunds which might involve a de- lay of four or five years. In addi- tion, he claimed that if the war ends before companies have com- pletely amortized the amount ex- pended for new plants, some may not be able to deduct the balance of such amortization as originally contemplated. The bill introduced by Congressman Disney, the speaker said, is designed to correct the Situ- ation and deserves general support by industry.
 Highlighting the talk was a statement that great benefits would accrue to labor. agriculture and the entire industrial economy if corp oration taxes were completely elim- mated. ''Such a plan worked in England" MT. Davidson stated. 'It can work equally well here. AL ready such a plan has been en- dorsed by some farm leaders and others.
 Both established and new in- dustry will need capital when the war is over," MT. Davidson con- cluded. There will be billions of dollars available for investment in industry. But, the present tax rates will preveit such use. For example, one investor who contemplated put ting $l0 million into a business which he believed would earn two million the first year, was advised by his attorney that he would have left. after taxes. $65. .886.09 - re- turn of six tenthS of one per cent. He did not invest - neither will others.
 "Simplification and reduction of corporation taxes are imperative If new enterprises are to be operated in the postwar era, providing a heavy cushion of employment for the millions released from war in- duStry."
 apueared currently sympathetic to