Detroit evening times., 1945-05-16

NEWS
BY Paul
Mallon

WASHINGTON, May 15-Ths
w way the tax trimming pro-
gram was announced made ii
sound colossal, but II was far
short of that.
When business corporations
paid their excess profits taxes
trunning UP to 90 per cent or
meFe) in these war years. they
did so under a provision OF law
which promised a 10 per cent
refund within three to five
years.
All this new program does is
to say they may have their 10
per cent back now. No perma-
nent loss to the treasury will
result. Business will merely get
its refund sooner.
The notion behind this major
feature of the program is that
business may use the money at
once for reconversion. Some
viii need this help. Others have
accumulated cash serves
common corporate war prac-
tice).
THE other important change
Il will be Of considerable help
to small business. The lift in
exemptions on excess profits
taxes (not normal rates which
run above 40 per cent? from
$4,000 to S25, 900 will, in effect,
absolye businesses earning less
than SIS, ZOO from the profit
confiscation tax rates OF war.
But there is another provision
OF law which enabled corpora
tions to deduct from certain
normal rate payments certain
allowances if they paid high ex-
cess profits rates.
Thus the announced relief
will not be so great as the cited
figures have indicated. With the
normal tax hand the govern
-ment- -WitEtake-back- sorne-of
the balm il is offering with the
excess profits hand d.-==
This is about all there is in
the tax reduction"
DEHIND its announcement,
- however, the participants
indulged themselves in a little
light and fancy stabbing. Sem
ate finance chairman George
had announced two days earlier
he thought the government
should promise a real reduction
TO begin next Jan. 1, whether
or net Japan was -heaten.
Next day from the treasury
came an anonymous statement
that George (whom some have
mentioned as possible successor
to MorgenthaW had reversed
his position on this.
An official of the treasury
department had given that in
formation to newsmen, suggest
ing it be published without
credit, as ff-the-record inspira-
ton. The newsmen did not
think George had changed his
mind and the charge was not
printed, at least not generally.
This was not the only piquant
SAVIOR of the deal. After George
and House ways and means
chairman Doughton had been at
the White House discussing
taxes with President Truman,
the newspapers were able TO
carry an authoritative state
ment that Mr.. Truman had told
Congress to go ahead and ham
die taxes in its own way, as he
was too busy to bother.
THIS sounded very much like
u Mr.. Morgenthau was not to
have his usual annual soul
stirring presentation of tax pro-
grams to Congress (none OF
which have been adopted in late
years. 1t also somehow en-
couraged people to believe the
reports that George might get
the treasury Secretaryship.
My own information is that
nothing is likely to be done
about a cabinet change in treas
ury until after the Breton
Woods agreements sink or swim
in Congress.
Other than that il can be
said Truman appreciates Nor
genthau's good New York finan-
cial connections, but, on the
other hand, George would take
the job If offered.
Certain senator's whom I
greatly respect think Morgen-
thau will go in a few months
and the job will be handed to
Truman's Missouri banking
friend, John Snyder.
From this series of inner
events, il is plain the admins
tration is not going into any
real tax reduction for some
time. It will not accept the
George program promising ac-
ton in 1916. and is content to
rest with the faint trimmings
presented last week.
Iliafrfhufad h.