Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-05-11
Truman Favors
Tax Relief Plan,
|GeorgeSays
Five-Point Program
Is Discussed at
White House PurIey
BY ]. A. O'LEARY.

five-point tax program an
nounced last night at the Capt.
toll to help business meet recon-
version problems was reported
by congressional tax leaders to-
day after a conference with
President Truman.
Chairman George of the Senate
Finance Committee and Chairman
Doughton of the House Ways and
Means Committee discussed the
program with the President and
Senator George said later that Mr..
Truman concurred in the five-point
revision plan.
Meanwhile, congressional experts
estimated that the cash position of
the American business concerns to
meet the problems of reconversion
may be improved to the extent Of
S., 700 ,000, 900 during the next few
years by the program.
This estimate does not mean that
the tax liabilities of business under
existing law are being reduced by
that amount, but that business
would have the use during the next
year or two of refunds and other
benefits that the present tax law
would give them in later years.
Big Help to Small Business.
Small business would benefit par
ticularly from a proposed increase
in the excess profits tax exemption
from $4,000 to 5000. The other
four points do not change tax rates,
but merely speed up various postwar
credits in the present war.
Announced Jointly by Chairman
Doughton, Chairman George and
Secretary of the Treasury Morgen-
THAI, the program provides for:
l. Raising the excess profits tax
exemption from $4,000 to s25, 900,
effective with the beginning of the
1916 tax year.
2. Giving business the immediate
benefit of the 10 per cent postwar
excess profits tax credit, by applying
it to 1914 taxes now being paid.
This, in effect, would mean fixing
the excess profits tax rate at IS per
cent, instead of collecting up to IS
per cent now. and giving a 10 per
cent refund after the war.
Postwar Refunds Bonds.
3. Advance to January /, 1916, the
maturity date of outstanding excess
profits postwar refund bonds. These
are the bonds that have been is
sued to show the 10 per cent post
war tax credit allowed to business
concerns by the existing law.
4. Speedup refunds resulting from
carry-backs of net operating losses
and of unused excess profits credits.
5. Expedite refunds resulting from
the recomputation of deductions for
amortization of emergency facilities.
Representative Reed, Republican,
of New York. a member of the Ways
and Means Committee, lost no time
today in indicating that the minor
ity may seek to give business a
greater measure of immediate re-
lief.
Not Realistic Enough"
Declaring the five-point program
is mot realistic enough Mr.. Reed
pointed out that he has a bill pend
ing to bring the excess profits tax
rate down to 60 per cent instead of
stopping at IS per cent. He eX-
pressed fear that unless more is
done now than proposed in the adj
ministration program there will be
100000 unemployed walking the
streets" as war industry begins to
taper off.
No serious opposition is expected
to these emergency adjustments,
in the five-point plan, which do
not affect income taxpayers gen.
orally. Later in the summer,
however, congressional tax experts
will turn their attention to a
more general revision of the tax
structure. Present indications are
that at that time congressional and
administration leaders may dis
agree on the extent to which income
taxes should be reduced pending the
defeat of Japan.
Up to Ways-Means Group.
Tax bills must originate in the
House, and if the Ways and Means
Committee succeeds in disposing of
the reciprocal trade agreement ex-
tension bill early next week, it
probably will turn Immediately to
the five-point business tax program.
Representative Doughton and
Senator George explained the pur-
pose of the changes in the following
statement:
1.-The proposed changes would i'm
prove the cash position of business
during the period of reconversion to
peacetime production. Only the in
crease in the specific exemption
would reduce ultimate tax liabilities.
"The increase in the specific ex-
emption. in addition to improving
the cash position of corporations
during the reconversion period,
would relieve small corporations
from the burden of the excess profits
tax.
1.-THE committee finds that Fed
eral expenditures can be expected
to remain at a high level at least
until after the defeat of Japan and
that the need for revenue will not