Evening star., 1945-10-24
By ]. A. O'LEARY.

The excess profits tax was
called the greatest single OBJ
stacle to peacetime recovery" by
Chairman George of the Senate
Finance Committee today as he
opened Senate debate on the bill
to grant corporations and indi-
viduals $500, 100000 of tax re-
lief next year.
Repeal of the excess profits levy
on January is one of the chief
changes the Senate bill makes in
the House version, which merely
reduced this tax from 85.5 to go
per cent in 1916, postponing its
repeal until 1947.
Senator Morse, Republican, of
Oregon, interrupted to indorse the
chairman's statement that excess
profits repeal will stimulate recon-
version, but he deplored the total
amount of tax reduction in the bill.
People Must Pay for Benefits.
Senator Morse said he realized 1t
is good politics" to tell the people
they can have their cake and eat
it, too, but if we are going to keep
the value of the dollar stable we
have got to convince the people
they must pay for the benefits they
are receiving from the Government" :"
Il am willing to put my political
head an the block to try to point
out that we have got to be willing to
pay in the next few years high taxes
to maintain our economy" the Ore
gon Senator continued.
Meanwhile, Senator La Toilette,
Progressive of Wisconsin, indicated
he will not press for any increase in
the $500 exemption allowed individ-
ual taxpayers for each dependent,
although he would have preferred
to see part of the individual tax re-
lief granted in that manner. The
parliamentary situation on this bill,
which Congress is trying to pass in a
hurry for the new calendar year,
makes it difficult to propose changes
not adopted In committee, he point
ed out.
Passage Sought by Tomorrow.
Although a variety of moves are
under way to apply further reduc-
tions, Chairman George of the
Finance Committee hopes the bill
will pass tomorrow and go to con-
ference with the House.
Senator vandenberg. Republican,
of Michigan will carry to the floor
the fight he lost ON tie vote in
committee to give a large number
OF small corporations more imme-
diate relief by a retroactive reduc-
tion in their 1945 excess profits tax,
payable in March, 1916. AS the bill
came from committee, the corpora
ton reductions start in 1946, but
will not be reflected in lower pay
ments until returns are filed in
1947.
The Michigan Senator will urge
that a minimum exemption of $25,-
600 from excess profits tax be al
lowed for 1945, which he estimated
would save small companies about
SIS 100000.
Large Corporations Excluded.
At present there is fiat exemp-
tion of $4,000, plus credit based
either on invested capital or average
earnings. If these two allowances
fell short OF s25 900, a corporation
would get the additional exemption
up to that figure. 1t would not
benefit large corporations.
Both the House and Senate bills
already relieve 100000 low-income
individuals of all income tax, by
applying to the per cent normal
tax the same exemptions now
granted against surtaxes.
Another floor battle may develop
to restore to the bill some or all of
the excise tax reductions allowed by
the House, but rejected in the Senate
committee. These are sales taxes on
variety of commodities and serv-
ices. The question before Congress
is whether these rates should return
to the 1912 level on July /. or six
months after the official declaration
OF the end of hostilities, an indefinite
date.
On the eve of the floor debate,
Senator Johnson, Democrat, of
Colorado, a member of the Finance
Committee, told reporters he is not
proud of the bill as it stands.
Congress is getting the cart be-
fore the OK" he said, "in that the
reduction of Federal spending should
come before tax reductions. There
are no indications that wild-eyed
spending is on the decline"