Evening star., 1944-02-24

"A. P. Photo.
depletion allowances in the de-
velopment or marketing of min
erals; and the use by the Presi-
dent of the phrase questionable
in any case" indicates that his
objections in this regard coincide
with the traditional views Of the
Treasury. But according to the
Treasury's own figures, the
amount involved In revenue by
this provision is 30 insignificant
as to make . veto on that ground
almost grotesque.
The President refers to the
lumber industry rs being per-
mitted to treat income from the
cutting of timber as q capital
gain rather than as annual In
come, and cites that provision
Of the bill as 4 loophole In favor
Of special privilege. In all fair
ness to the Congress and to the
people who read the Presidents
message, 1t ought to be stated
that under the present law, If
q man owns q tract of timber
and sells that timber, or sells
the land on which 1t grows, to
another person, company or in
dustry. he is allowed, under the
law, to pay taxes upon 1t rs capi-
tai gain, not as annual income,
for the year In which it Is sold.
Declares Many Experts
Don't Understand Tax.
The difference between the tax
provisions relating to capital
gains and those relating to an
nual income are technical and
are not understood by the aver
age citizen or by many experts.
have neither the time nor
the disposition to go into an
explanation Of this difference ut
this time. .-
Sufice it to say that while un-
der the present law the owners
Of timberland may sell it to .
lumber or milling company, or
to any one else who moves In
upon 1t and cuts the timber and
sells it, and are allowed to pay
taxes on the basis Of q capital
gain, the person who buys, cuts
and markets the timber pays
taxes on an annual income basis,
because he Is In that basis; and
in order to arrive at his income
for that year upon his operation
In that or any other field, he is
allowed to deduct the costs orig
inally, together with the ex-
penses of operation, to arrive at
the net income upon which he
will pay the tax.
But II the owner Of that same
land and that same timber, in
stead Of selling it to another,
moves a sawmill upon 1t and
cuts 1t himself and sells it him
seld In the market, he is taxed
upon 1t as income for that year.
In other words, If he sells it
outright to another. he is taxed
in one way. II he cuts it him.
self he Is taxed in another way.
This discrimination was recog-
nized by the committee as an
injustice to owners Of land con-
tanning timber.
I voted for this timber amend
ment as a member of the FL
nance Committee. voted for it
on the floor Of the United States
Senate. signed the conference
report containing 1t, as one Of
the conferees on the part Of the
Senate. For that vote / make no
apology to any human being. I
did not vote for it in order to
create . fantastic or imaginary
loophole to allow some one to
escape taxes. I voted for 1t as
an act Of justice to those who
grow timber over q period Of q
generation, or half Z century,
and who are entitled to equal
treatment, no matter In what
manner they dispose Of the
timber.
Presidents Christmas Trees
Contrasted to Oaks.
The President, in order to
justify his treatment OF this
amendment. cites his own ex-
perience rs . timber man and
from his experience he regards
such income as constituting an
nual income. / do not know to
what extent the President Il en-
gagged In the timber business. I
do know that he sells Christmas
trees at Christmas time. They
are no doubt Of easy growth and
short life and ] have no doubt
that the income from the sale
Of them constitutes annual In
come, not only to him, but that
such income would constitute
annual income to any other per-
sons engaged In . like enterprise.
But, Mr.. President. to COM
pare these little Pine bushes