Evening star., 1947-05-10
|Senaie Tax Bill Bars
u. 5. Debt Reduction,
George Declares
BY The Assoeiatsd Press

IVVVs NJ NSStUiNS
BY fhe Associnfsd Press
Senator George, Democrat. OF
Georgia declared today a $4.-
000, ,o0o, ,000-a-year income tax
cut approved by the Senate Fl
nance Committee would leave
mo surplus to pay on the $685.
600, 100000 public debt.
The meausre, slashing Ievies Sc
to los per cent, was voted over
Senator Georges protest that action
should be delayed until Congress
has better idea what next years
Government spending viii be.
It would be effective July / in
stead of retroactive to last January
| /, the date fixed in the House bill
and would limit the cut on incomes
in the range of SIS, ,728 to $302 1896
to Is per cent instead Of the House
versions 20 per cent.
Five Democrats Vote sNo."
Senator George was defeated in
a motion to delay the effective date
until next January l and finally
joined the committees seven Repub-
Hcan members yesterday in voting
to send the bill to the floor, where
he reserved the right to oppose 1t.
The. other five Democrats on the
committee voted against the bill.
The measure is an amended ver-
sion of House bill No. l, which
started out as 20 per cent across
the board reduction sponsored by
Ways and Means Committee Chair
man Knutson. The House finally
approved a bill with graduated re-
auctions ranging from 80 to los
per cent and retroactive to last
January |.
The most important change made
by the Senate committee was delay
ing the effective date six months.
Would Take Effect July /.
New withholding rates would take
effect July l if the Senate version
becomes law. The withheld tax for
most wage and salary earners would
go down 80 or 20 per cent then, de-
pending on the income bracket. But
next March, when the taxpayer
makes out his return for l947, he
would find his cut over the whole
year figures out only Is or 10 per
cent.
In his return for 1913, however, he
would get the full 20 or 80 per cent
benefit.
This is the schedule of rate cuts
voted by the Senators:
80 per cent off for persons with
net incomes, after exemptions and
deductions, of $1,000 or less; 80 to
20 per cent on incomes from $1,000
to S1,396; 20 per cent on incomes
from $1,396 to $79,728; IS per cent
on incomes from $79,728 to $302, 1896 I:
los per cent on all above $302 1896.
The Senate committee wrote in
the Is per cent bracket. The House
had spread the 20 per cent reduction
over all incomes between 81 1896 and
$302, 1896.
May Reach Senate Wednesday.
In addition, taxpayers more than
IS years of age would get an extra
$500 exemption, regardless of wheth-
er they had income, such as social
security benefits, otherwise exempt
from tax.
Chairman Millikin said he expects
to draft report and send the bill
formally to the Senate about next
Wednesday. 1t has right of way
there after the pending labor bill
and $350,000,0O0 foreign relief
measure,
Senator George estimated it will
take two weeks to clear the tax cut
through the Senate and two more to
get it through conference with the
House. '&
What the final bills fate may be
when 1t reaches the White House is
uncertain, but President Truman
has told Congress repeatedly he
thinks reduction of the public debt
should come before tax-cutting.
How Committee Voted.
Voting for the bill in committee
were Senators George, Milliken and
the other Republican members. Taft
of Ohio, Butler of Nebraska, Brew
ster of Maine, Bushfield of South
Dakota, Hawkes. of New Jersey and
Martin of Pennsylvania. Voting
against it were the other five dem
ocrats, Barkley of Kentucky, Con-
nally of Texas, Byrd of Virginia
johnson of Colorado and Lucas of
Illinois.
A straight party line vote, to 6,
defeated Senator Georges motion to
make any cut effective next jan
uary /. A substitute motion, by SEN
ator Millikin, making the effective
date July l was approved unani-
mously.