Evening star., 1945-10-21
T uxes
Continued From First Page.)

wage earners will start January l,
since they are on pay-as-you-go
withholding basis.
Chairman George of the Finance
Committee said that if the move
to apply an exemption of not less
than $4,000 to 1945 excess profits |
is adopted, it would take about 3D.
600 corporations out of the excess
profits class.
Corporations are allowed a credit
against excess profits tax, based on
a percentage of either invested capt.
tai or of everage earnings in the
base period of 1896 to 1899. The
theory of the proposed amendment
is that if this credit did not amount
to $4,000, the exemption would be
brought up to that level. It would
not effect large corporations.
Flat Exemption Due.
In the event the Senate does not
prevail on the House to drop the
excess profits tax entirely on Janu-
airy /, there will be $4,000 fiat
exemption in 1916, under a separate
law passed by Congress last August.
Although the House has voted to
continue the excess profits levy dur
ing 1916 at the reduced ,ate of
so per cent, and repeal it in 1o47,
there is a good chance that in con-
ference it will accept the Senate
provision for repeal in 1916. If this
happens, the Senate probably will
have to yield on some of the other
House provisions it eliminated.
Although Chairman George eX-
poets a fight in the Senate to restore
the House cuts in excise levies, he
is not expected to join such move.
In fact, he said, 'it may be that
we cannot abandon very wide ex-
cess tax base until we get the budget
more nearly balanced"
No Sales Resistance.
The Georgia Senator agreed that,
In normal times, when supplies of
goods are plentiful, excise taxes may
create sales resistance. He pre-
dicted, however, that for the next
year or two supplies generally would
be under the demand
The list of eXcises the House voted
to cut back to 1912 rates, but which
the Senate committee retained at
present levels, includes: Jewelry
furs. toilet preparations, alcoholic
beverages, electric light bulbs. lug
gage, cabarets, admission tickets,
travel tickets, membership dues, tele-
phone service, billiard tables and
bowling alleys.
Senator George said there are
other excise levies the House did
not reduce, but which should be
given consideration if any reduc-
tions are to be made
The Finance Committee will meet
Tuesday morning to study the re-
viSed draft of the House bill, before
starting Senate debate Wednesday.
Service Pay Exempted.
The committee bill cancels income
tax on the service pay of enlisted
personnel for the war years, to help
the comparatively few who may not
have been freed from taxation by
the special 1,500 military exemp-
ton. 1t also gives officers three
years in which to pay accrued taxes,
and applies the same period of grace
to service personnel who went into
uniform before the pay-as-you-go
law passed and have unpaid taxes
from civilian life.
The committee postponed for con-
sideration in next years tax bill a
proposal to continue the $500
servicemen's exemption for one year
after discharge. Senator George
said an effort may be made to re-
new that on the floor, but he sup
posed the Senate would not go into
1t in view of the Treasury's desire
to give it further study. He said
the Treasury experts want to go
a long way, but they want to see
what it would cost first"
Senator George said the main ad-
vantage of the Senate bill over the
House version, from the standpoint
OF helping reconversion, is in the
earlier repeal of the excess profits
tax. He said he thought the reve-
nue. loss of $2,555 ,000, 900 from re-
peal of that tax, as estimated by the
experts, is high, and added, "I am
not worried that, In the long run
this bill will cost the Treasury much
more than 5000, ,000, ,000."