Evening star., 1944-07-10
Legislators Studying
Industria|ists' Plan
For Postwar Tax Slash
Minnesotons' Proposal
For so Pct. Reduction
Gets Mixed Reception
By the Associated Press.


A Minnesota Twin Cities
plan for a go per cent postwar
slice in Federal taxation-alone
with a S per cent Federal retail
sales tax-got mixed reception
today among the few congress
sional tax specialists remaining
here during the congressional
recess.
The plan. brought to Washington
by a group of Minneapolis and ST.
Paul businessmen. calls for enact :
ment of postwar tax legislation i'm
mediately. with inducements for
business and industry to arrange
for the peacetime economy. 1t pro-
poses immediate reduction of in
dividual income taxes with retention
of wartime normal and surtax rates
for corporations for national post
war security.
Senator Connally. Democrat, of
Texas. member of the Senate FL
nance Committee. scanned the plan
and commented that 1t has several
features with which do not agree !"
He did not discuss his objections in
detail.
Taxes to BE Reduced.
However, he said taxes will be
reduced after the war"
He could not agree with the Min
nesota businessmen's contention
that postwar tax statute can be
enacted now for application at the
termination of hostili les. saying
We've got to know what conditions
will be before We can write peace
time tax laws"
Representative Gearhart, Repub-
lican. of California, member of the
House Ways and Means Committee.
expressed intense interest in the
Twin Cities proposals He said he
is committed to reduction in taxes
after the war and favors thorough
investigation of the possibilities of a
Federal retail sales tax.
The Minnesotans laid emphasis on
postwar tax system granting far
reaching inducements for risk in
vestments and expanded business
and industrial enterprise.
To this end. the group proposed
that 40 per cent of dividends to indi-
viduals received from domestic cor
porations be exempt from Federal
taxation.
Proposals Outlined.
The group, one of the first to SUBJ
NIT a detailed plan by businessmen
for conversion to peacetime taxation.
proposed that the overall Federal
tax burden be cut from the current
record high of $43, ,000, ,0O0, 600 to sl8.-
600 ,0OO, 900. The Minnesotans would
reduce corporation taxes at the war
end by thirds. from the present
approximately SIS, 900 .000, 900 to S.
000. .000, 900, and overall individual
burdens would be halved. from ST.
600 900 900 to $1,000. 900 900.
In arriving at their program. they
assumed that the postwar national
income would approximate $l20, ,O0O,-
000, 900 annually, twice the average
1or the decade preceding the attack
on Pearl Harbor.
AS to income tax rates, the report
says:
Relatively heavy corporate In
come tax rates are not so harmful
to the private enterprise system as
heavy individual income tax rates,
for the reason that the latter shut
off at the source all possibility OF
venturing capital by individuals
With repeal of the excess profits
tax, the plan recommends the reten-
ton of current normal and surtax
rates. ranging up to 40 per cent, for
corporations, but substantial surtax
rate reductions on individual in
comes.
In centive for investments In cor
(See TAXES. Page A-5)