Evening star., 1945-10-15
Vinson Defends
Cut Of Million
From Tax Rolls
Secretary Critieizes
House Provisions for
Surtux Reductions
By ]. A. O'LEARY.

The dropping of $4,000 900 low
income individuals from the tax
rolls in the House-approved S.
30O,000,000 tax reduction bill was
defended today by Secretary of
the Treasury Vinson at the OPEN
ing of Senate Finance Commit
tee hearings on the measure.
At the same time, Mr.. Vinson op-
posed House provisions which he
said would cut off another $2,O00,-
100000 in 1947.
Taking notice of expressions by
some Senators that it would be wiser
to grant these wage-earners sub
stantial reductions without freeing
them from taxes entirely, MIR.
Vinson said:
THE thought has been expressed,
which do not share, that with the
repeal of the normal tax the income
tax would not reach enough people
or income. This can be true only If
surtax exemptions are too high, and
in that case the issue should be
faced Squarely.
Ability to Pay.
IF there is ability to pay below
existing surtax exemptions, these
levels should be tapped in the best
and fairest manner, with a system
OF exemptions which recognizes
family status. The existing normal
tax is not a desirable way to
broaden the base of the income tax
or to lengthen the tax rolls"
Although the House did not re-
peal the per cent normal tax it
accomplished the goal of eliminat-
ing the 12,000,0 900 taxpayers in the
lower brackets by granting the
same exemptions for both normal
and surtaX. This meant $500 for
the taxpayer, $500 for a wife and
$500 for each child Now only one
$500 is allowed in figuring the nor
NAL tax.
AS predicted, Secretary vinson
renewed his plea for immediate re-
peal of the excess profits tax, which
the House merely reduced from 85.5
to so per cent.
would Aid ReeOnyersion.
The Treasury had agreed with
Chairman George of the Senate
Finance Committee that outright
repeal of this wartime device for
controlling profits would do more
to speed reconversion and aid en-
ployment than the House plan of
spreading corporation tax relief be-
tween the excess profit and the reg
ular corporation rates.
Mr.. Vinson also opposed the action
of the House in granting tax cuts of
at least 10 per cent to individuals
subject to surtax.
He urged the Senate to follow his
original plan of merely repeating the
| 8 per cent normal tax, without seal
Il ing down the surtax rates by four
points in each bracket.
After Mr.. Vinson had testified
that the Government faces a 80
billion dollar deficit this fiscal year.
without allowing for the pending
tax cuts, Senator Byrd, Democrat,
of Virginia, asked him what his
ideas are on balancing the budget.
Mr.. Vinson, who formerly served
in the House, said there are lot of
"ifs" to that question, including the
size of congressional appropriations
in the years just ahead.
Il am told that by July l, 1947,
the deficit for that fiscal year will
be down to somewhere between five
and eight billion dollars, but that's
| a terribly rough estimate" the
Treasury head replied.
Senator Byrd figured that would
run the national debt up to 281 bill
lion by July, 1947.
Must "Set Sights Higher"
| Mr.. Vinson told the Senators this
country will have to "set it's sights
higher" and aim at a volume of pro-
duction that will produce a national
income of $13o, ZOO, 900, 900 a year in
order to carry the debt left by the
war Senator Taft brought out that
the peak of national income reached
during the war was S156 900 600, 900.
Mr.. Vinson pointed out that the
Government peacetime budget,
when conditions get back to normal.
has been estimated at $25, ,000, 900 900
year, and said, "I just don't think
we can live under it" if the national
income remains at only s1o0 900, ,o0o,- :
900 year.
Mr.. Vinson argued that large
tax is easier to pay with a high
income than is a small tax with a
lower income.
Senator Barkley, majority leader,
(See TAXES, Page A-31