Evening star., 1945-10-01
Vinson Proposes
S5,OOO,OOO,0O0
Cut in Taxes
Income Levy Slash
Of 80 Would Relieve
II Million of Returns
BY ]. A. O'LEARY.

A three-point program to cut
taxes by $4,000, 100000 in 1946
was laid before the House Ways
and Means Committee today by
Secretary of the Treasury Vim
son.
1t called for:
/. Repeal of the per cent normal
tax, effective January l, to take be-
tween 10 and II million low bracket
individuals off the tax rolls. The
revenue reduction would total ST.
OS5, 100000.
2. Repeal of the 95 per cent excess
profits tax on corporations, reduc-
tion of $2,555 100000.
8. Fixing July l, 1916, as the expi-
ration date for wartime excise taxes
on such items as cosmetics, furs and
jewelry, which would otherwise con-
tinue until six months after the end
of hostilities is declared, an indefi-
mite period. This would knock an
other $547, 100000 off Treasury re-
ceipts next, year.
Net Reduction Billion.
While these steps would aggregate
s5,187, 900 900, Mr.. VinSon pointed out
that an increased volume of business
activity and spending resulting from
the tax relief would increase other
tax collections enough to make the
net loss in revenue not more than
$5,000,O00 900.
Secretary Vinson took note OF the
fact that Congress also faces a de-
cision on whether to let the payroll
tax for old-age insurance go up
automatically on January l from /
per cent to 2k per cent each on
employer and employe, the effect Of
which would be to cancel out good
part of the general tax relief about
to be given individuals and business.
On this subject, the Secretary
contented himself with recon-
mendation that revision of pay
roll tax rates should wait to be
made part of the broader action
on social security financing as a
whole" He had reference to bills
Congress will consider early next
year to. put in the broader cradle
to-grave social security program.
COP Seeks 20 Per Cent Cut.
AS the Treasury head read long
prepared statement to the commit
tee in closed session, Republicans
were making plans to fight for an
alternative program that would give
all individuals a fiat 20 per cent
tax cut across the board.
In a separate report made pub
lie today, War Mobilization Director
Snyder indorsed the main features
of the Vinson tax program. Most
of Mr.. Wilson's carefully prepared
document painted a word picture OF
the many heavy obligations still
facing the Federal Government as
an aftermath of the war, which, he
warned, make it unwise for Congress
to 60 any further than he is recon-
mending now in slashing taxes for
next year.
He reminded the law makers that
even if no reduction is made in
rates, the decline in payrolls and
business profits resulting from the
end of the war would cut the tax
yield by $9,0oo,0OO,0O below the
peak of war collections.
Must Reckon Impact.
1.-THE taxpayer will not feel any
relief from that drop in tax liabili-
ties, but the Government must
reckon with its impact on revenue
receipts" Mr.. Vinsen pointed out.
In recommending that the bulk
of the individual tax relief be given
those in the low brackets by repeal
of the 3 per cent normal tax, Mr..
Vinson testified:
THE normal tax imposes income
tax on about 100000 families
which are exempt from the surtax
Thus, family composed of man,
his wife and one child has three
surtax exemptions of $500 each and
is thus exempt from surtax on net
income up to 81, 500. The normal tax,
however, applies on all net income
above $500 for each income receiver
without regard to family status or
number of dependents. Accordingly,
this family would pay normal tax
of 3 per cent on all income above
$500.
The amounts of tax are relatively
small from the viewpoint of the
Government and, accordingly, rela-
lively expensive to collect. both
through withholding and through