Evening star., 1945-03-04
Treasury Worried by Plan
To Hold Tax to Is Per Cent
Movement Launched in States Would. Put
Maximum on Federal Excess Income and
Estate Leves Through Amendment
By Raym ond p. Brandt.

Treasury Department officials are dis
turbed over what might happen during
the next six months with the 27 State
Legislatures now in session which either
have not acted or acted adversely on
the proposal to prohibit Congress from
levying, in peacetime, an income, estate
or gift tax of more than 25 per cent.
Within the past five years 18 State
Legislatures have passed resolutions re-
questing Congress, in conformity with
Article v of the Constitution, to call
for conventions to repeal the 10th
amendment and to adopt what would
be the 22d amendment, which would
limit three of the most important Fed
eral taxes to 25 per cent. The Arkansas
Legislature unanimously approved the
resolution in 1943, but rescinded its ac-
ton this year, so the number of States
on record for the restrictive plan is II.
The lower houses of three Legislatures
meeting this year have voted to rescind
previous actions calling for the amend
ment. This happened in Iowa, Ken
tucky and Wisconsin. These votes. al
though they reflect changing sentiment
or more serious consideration, did not
void the previous approval given by the
two houses of these Legislatures.
Last week the New York Senate,
which unanimously approved the prop
osition last year, declined by vote of
"a to "a to memorialize Congress for the
amendment. All affirmative votes were
Republican. Six Republicans joined
with Is Democrats to defeat the plan.
Reports from Albany say that similar
measure in the Assembly probably will
not be voted on because concurrence
of both houses is required for passage.
Senators Favor Delays.
The decision this week by the Senate
judiciary Committee to pigeonhole until
the end of the war all congressional pro-
posals to amend the Constitution would
not affect the State-sponsored tax re-
duction plan should two-thirds of the
State Legislatures demand submission
of the amendment. Chairman Pat Nc
Carran said that the vote of his commit
tee related only to congressional resolu-
tions. He pointed out that the Consti-
tuition said that Congress "Shall' sub
NIT the amendment on the application
of two-thirds of the States.
The principal lobbies for the amend
ment are the Committee for Constitu-
tional Government and the American
Taxpayers Association, Inc. both of
which have branches or affiliations
which operate in the State capitols
The powers behind the Constitutional
Government Committee are Frank E.
Gannett, multimillionaire New York
newspaper publisher and aspirant for
the Republican presidential nomination;
former Democratic Representative Sam
uel Pettengill of Indiana, now an active
anti-Roosevelt worker, and Dr. Edward
A. Rumley, who was indicted last year
for his refusal to obey a subpoena of the
House Campaign Expenses Investigating
Committee, which wanted list of all
contributors of more than s100 to the
committee.
The taxpayers association is headed
by A. F. Metz of the Okonite Co. of New
Jersey, but the active director is D. E.
Casey, vice president and secretary, a
former bureau chief of the Department
of Commerce
Fifteen More Required.
Treasury officials are worried because
under Article V of the Constitution.
30 States can force Congress to submit
an amendment for ratification by three
fourths of the State Legislatures or State
conventions. This procedure has never
been tried before and was hit upon
after Congress pigeon-holed constitu-
tional amendments on the same subject
offered in the traditional way. Since
II State Legislatures have already ap-
proved the tax limitation amendment,
often with little or no debate, officials
fear that Is more State bodies may,