Evening star., 1944-09-06
Tax Leaders Divided
On Plan Providing
@% Postwar Slash
1y the Associated p.e.s.

BY the Associated Press.
Congressional tax leaders gave
. mixed reception today to q
postwar tax plan which proposes
sharp reduction of corporation
income taxes and exemption OF
stockholders dividends from the
standard individual tax.
The Committee for Economic De-
velopment, an organization of lead
ing businessmen, recommended the
plan, calling for so per cent overall
slash tn postwar tax collections and
said its idea of supplanting the sur
tax-normal tax levy on corporate
earnings with a single --'fiat rate
would stimulate investsasnt Of risk
capital, expanded private enterprise
and create jobs.
Based on $1l0, ,O00, COX, 900 Income.
1t based its proposal on an ex-
pected peacetime national income
OF $140, 600, ,000, 900, more than twice
the prewar 10-year average.
Chairman Doughton OF the House
Ways and Means Committee, which
originates all tax legislation, said
the plan lis far-reaching and I
would want to study it carefully be-
fore made any comment about it."
but he indicated re believes 1t is
too early to write an exact tax plan
for the postwar era. -
"A good DOCTOR" he said, doesn't
operate or prescribe medicine until
he knows the condition Of the
patient. We don't know now what
the postwar economic problems will
be-"
Representative Knutson OF Min
nesota, Ways and Means ranking
Republican, said II don't like the
CED plan as well as I do the Twin
Cities plan. think we are a long
way from a $4,000 900 900 peace
time income-perhaps two or three
years. There are so many recon-
version problems to be solved"
Alternate Plan Offered.
The Twin Cities plan, brought to
Washington several months ago by
Minneapolis and St. Paul business
men, also proposed incentives for
risk capital investments and expan-
sion Of private enterprise. How
ever, 1t recommended retention of
the 40 per cent corporation COM
bined normal and surtax, while sug-
gesting that 40 per cent of divi-
dends paid to individuals by cor
porations be exempt from the per-
sonal income tax, as an encourage
ment to investments. 1t anticipated
a peacetime national income Of
e120, 900 900, 900.
prepared by a research committee
composed of some of the country's
most prominent businessmen and
tndustrialists, among them Eric
johnson, president of the United
States Chamber of Commerce, and
Beardsley Ruml, sponsor OF pay-as-
you-go taxes for individuals, the CED
report emphasized that full postwar
employment depended largely on
maximum individual spending power
and maximum investment capital
IN plant expansions and new en-
terprises.
Would End Double" Taxation.
The report was made public
locally by the Washington Board
Of Trade, whose Postwar Planning
Committee chairman, Charles A.
Robinson, is director of the Com
mittee for Economic Development.
The plan would put an end to
what its trainers called double
taxation" of corporation earnings.
1t proposed:
Corporations-The present cor
porate 40 per cent normal and sur
tax rate should be replaced by a
single tax at a nat rate, the same
as the proposed standard rate of
is to 20 per cent for individual in
comes. This, the report said, would
be in effect a pay-as-you-go tax
on the dividends of stockholders, at
the standard individual income rate.
Would Cut Personal Levies.
Individuals Downward revision
OF personal income levies, including
elimination of the present 3 per
cent normal tax which allows no
credit for dependents, thus remov-
ing some 100000 lower income in
dividuals from the tax rolls. The
present combined tax of % per cent
for the lowest bracket of taxable
income would be replaced by a
single standard tax of 16 to 20 per
cent. Tax rates on incomes above
the lowest bracket also would be
reduced substantially.
Excises-Repeal all Federal ex-
else taxes. except those on liquor,
tobacco and perhaps gasoline. :"
This would erase these levies on
such items as jewelry, furs and lip
stick.
The plan agrees in large measure
with previous proposals by Mr..
Ruml and H. Christian Some, New
York merchant banker. The Ruml-
Some study was made for the Ma
tional Planning Association, a pri-
vate organization of business, labor
and Government representatives.