Evening star., 1944-02-08
Tuxes
Continued From First Page)

turned to the Job Of attempting to
simplify the present income tax
structure, the complexities Of which
have brought anguished cries from
all parts of the country. Chairman
Doughton said his House Ways and
Means Committee would begin a
study of the matter Immediately.
The tax measure, which passed the
Senate on voice vote and the
House on q roll-call ballot Of 238 to
101 late yesterday, provides these
outstanding raises in the present tax
structure.
Increased income and Victory
taxes, 1864, 900 900.
Increased corporation taxes, $502,-
100000.
Increased excise rates, $1,o51 ,3oo,-
600.
Increased postal rates, 500, ,s0o, 900.
Earned Income Credit Killed.
Effective in the 1914 tax year (al-
though not for 1943 returns due next
month";. individual income tax pay
ers will no longer be allowed the
10 per cent earned income credit
for Federal excise taxes they have
paid.
The victory tax, which has been
a S per cent levy with certain cred
Its varying with family status, be-
comes a straight per cent tax on
individual income above 1924 year
The corporate excess profits tax
rate rises from 90 to 95 per cent.
the specific exemption from $1,000
to $4,000. Rates of credit for in
vested capital are lowered per-
centagewise.
Postage on intra-city mail is
raised from to cents and airmail
postage is increased from to 8
cents.
s42,2oo, ,ooo, 900 Tax Total.
The anticipated s2,315 200 900 yield
from the new measure will increase
total Federal revenue above an esti-
mated $4,000, 10000 over a full
years operation. Both the Presi-
dent and the Treasury insisted on
increased taxes of at least $40, $780,
100000. But, faced with election
this fall, Congress was adamant in
its refusal to sanction the higher
rates which this increase would have
required.
The new tax bill will considerably
increase the amount the public pays
for luxury items such as liquor. on
which the tax is raised from $6 to
SO l00-proof gallon. 1t also provides
a tax Of 20 per cent of the retail
price on furs, cosmetics, luggage and
with the exception of a few items)
jeWelry. There are sharp boosts, too,
in the levies on telephone calls, rail-
road tickets, night club checks and
bowling alleys The admittance tax
to places of amusement becomes a
penny for each nickel OF charge.
Business interest in the new bill
centers on these items:
l. The 40 per cent normal and
surtax rate on corporate income is
not changed. The Treasury proposed
that the rate be made so per cent.
Excess Profits Levy Up.
z. The excess profits tax rate is
raised from 80 per cent to 95. How
ever, large part of the additional S
per cent would have been recovered
by the Government anyway through
the war contract renegotiation law.
Corporations will get a postwar re-
fund OF 10 per cent of the amount
they pay under the excess profits
tax.
3. The social security tax is frozen
at per cent each for employer and
employe. The rate on payrolls had
been scheduled to rise to 2 per cent
each on January /.
4. The war contract renegotiation
law Is amended to allow contractors
the right to appeal to the Court of
Tax Appeals If they are dissatisfied
with the findings of renegotiators
However, this does not affect rene
gotiation cases already closed.
The renegotiation section en-
braces standards for determination
Of what are excessive profits. All
items allowed as deduction for in
come and excessive profits tax pur-
poses are to be allowed the con-
tractor as items Of cost.