Evening star., 1945-10-28
TaxCut Measure
Expected. 10 Be
Ratified Quickly
s5,e2o, ,o0o, 900 Relief
For Corporations and
individuals Approved
(TGble Shouting Income Tar
Cuts on, Page All
By ]. A. O'LEARY.


Congressional ratification Is
expected early this week on the
1920 ZOO, 900 program for reduc-
ton of 1946 taxes on individuals
and corporations, agreed on
yesterday by House and Senate
conferees. ...-
Cutting deeper than the Treasury
or either branch of Congress origi-
nally proposed, the conferees signed
a report which takes 10000, 900 low
income wage earners off the tax
rolls, repeals the wartime excess
profits tax on corporations and
grants some relief to all individuals
and businesses.
OF the $4,000 900 persons who re-
main in the taxpaying class, the
bill reduces the effective rate nexs
year from % to 19 per cent for 3d.
600 900 of them, whose income after
exemptions does not exceed the first
surtax bracket of $4,000.
CCudtc ran UIIOWcu.
For the 4,0o00oo above the $4,000
surtax bracket, the final agreement
follows the Senate plan of giving
more relief than the House up to
500, 1000, but less than the House all
lowed above $4,000.
Under existing law, a taxpayer
cotc ny,txy eEnn
gardless of dependents, in comput-
ing the per cent normal tax, while
for surtax purposes married couple
gets $500 each, plus $500 for each
dependent child.
The new bill allows the same ex-
emptions against both taxes, which
removes the 100000 low-income
wage earners. 1t then takes per
cent off the rate in each surtax
bracket. The tax determined in this
manner is then further reduced by
5 per cent.
Other Features of Agreement.
Other highlights of the final
agreement are:
Wartime excise taxes on a score
of commodities and services are
kept at present rates until six
months after Congress or the Pres
ident declares the war ended off,
cially, which may or may not occur
| in 1916. The House wanted to re-
duce them on July /, 1916. These
levies include such articles as furs,
cosmetics, liquor and jewelry, enter
tainment admission tickets, travel
tickets and telephone service.
Repeals the SIS automobile stamp
tax, July /, for saving of $4,000
600 to motorists.
Keeps the special payroll tax for
old age insurance at the present
rate of / per cent each on employer
and employe for another year. I'm
der existing law these rates would
have gone up on January l to 21z
per cent each on employer and en-
ploye.
Exempts all enlisted servicemen
from the payment of income taxes
during their period of war service
and from filing returns. 1t also
grants commissioned officers
three-year extension of time in
which to pay accumulated taxes on
service pay and similar extension
on 1910 or 1941 taxes which be-
came due after the taxpayer entered
the service. The latter provision
also applies to warrant officers.
Corporations Are Relieved.
OF the nearly six billion total cut,
So, 1876 ,000, 900 went to corporation
relief, and $2,644, 900, 900 to individu-
ais. To these was added the $140, ,00O,-
600 by repeal of the automobile stamp
tax, and the conferees estimate 10
per cent of this goes to individuals.
The s3,136, 900, 900 corporation pro-
gram, which advocates believe will
hasten reconversion and create more
| jobs, consists of:
Repeal of the excess profits tax
on January /. s2,555 900, 900; COM
promise schedule of cuts in the
combined corporation normal and
surtax rates, $347 900 600, and re-
peal next July / of the capital stock
and declared value excess profits
tax, 1924, 1000, 900.
The chief controversy in confer
ence was over the method of help
ing corporations. The House wanted
to keep the excess profits tax until
l947 with the rate reduced from
85.5 to 60 per cent, and at the same
time give relief to corporations gen.
(See TAXES, Page AID