Evening star., 1945-10-27
S5,92O,00O,O00
Tax Cut 0k'd
By Conferees
Excess Profits Levy
Repealed, Earlier
Figures Increased
BULLETIN.

Complete agreement on a
bill reducing the 1946 tax
burden of individuals and
corporations by $500, 900 900
was reached today by House
and Senate conferees. The
agreement included repeal of
the excess profits tax, a COM
promise reduction in regular
corporation taxes, and the
Senate plan for reducing in
dividual taxes, which is more
favorable than the House on
incomes in the middle brac-
kets. The final cut is greater
than either house had voted.
House and Senate conferees on
the S5,788,000,000 tax reduction
bill turned today to their major
differences, including the excess
profits tax, after reaching prompt
agreement yesterday on conces-
sions to members of the armed
services.
The House conferees accented
Senate amendments forgiving all
Federal income taxes on the service
pay of enlisted men for the war
years. Most enlisted men have been
out of the taxpaying class by reason
OF the special $500 exemption
granted them two years ago. 1t will
benefit some in the higher non-com-
missioned pay grades. 1t also will
relieve enlisted personnel of the
necessity of filing returns, and
those who have paid a tax on service
pay will be entitled to refunds.
Grace Period for Officers.
In companion decisions, the con-
ferees also adopted a Senate provi-
sion granting commissioned officers
a three-year extension of time in
which to pay accumulated taxes on
their service pay, and similar ex-
tension for payment of taxes on pre-
service earned income for 1910 or
194l which became due after the
taxpayer entered the service. The
provision also applies to commits
stoned warrant officers.
The loss to the Treasury is not ex-
.pected to be great since most en-
listed personnel already had been
removed from the tax rolls by pro-
vision in present law for a special
sl,500 servicemen's exemption
Several controversial points still
were at issue, and there were indica-
tions the conference could not conn
plete its work before next week.
Differences Cited.
The Senate voted to repeal the ex-
cess profits tax on corporations next
January /. The House called for a
rate cut next year and full repeal in
l947, meanwhile reducing the surtax
rate on all corporations.
Senate and House versions of in
dividual income tax cuts vary in
method, but not much in effect as
far as most people are concerned.
The House wants to cut the heavy
wartime excise taxes back to their
1912 levels next July. The Senate
called for very limited number of
reductions, all affecting items not
touched by the House provision.
While the conferees worked on the
bill, Senator Fulbright, Democrat.
of Arkansas. delivered a Senate
speech advising against too much
haste in cutting back the Treasury's
revenue in the face of an unbalanced
budget He said he thought the
luxury taxes ought to be retained
until the danger of imitation is
clearly past.
Near Deadlock on Profits.
When the conference recessed
overnight, it was evident that
prevailed on the ex-
cess profits proviso.
I'VE talked and talked and talked
but made no progress" Representa-
tive Doughton, Democrat, of North
Carolina, the No. House tax man,
told reporters.
The veteran North Carolinian
said he personally would like to see
the excess profits levy repealed, If
at the same time some financial
encouragement would be given small
firms which are not subject to the
excess profits tax, and If the total
tax cut did not become too large.
Representative Knutson, Republic
can, of Minnesota said he hoped q
complete agreement could be
reached today.