Evening star., 1948-02-22
Tax Slash is Certain
During This Session,
hiNikin Predicts
By J. A. o'Leon

Chairman Mlilikan OF the SEN
ate Finance Committee ex-
pressed confidence yesterday
that income taxes will be cut
at this session of Congress. He
called his committee for a pre-
liminary closed meeting on the
subject tomorrow morning.
<Although the Chairman avoided
any forecast of the form or amount
of reduction, Senator George, Demo-
crat of Georgia. said the House
approved bill will have to be scaled
Gown to about $4,000 ,000, 900 If it is
to have chance of becoming law.
House Republicans estimate their
bill cuts the tax liability OF In
dividuals by $6,500 100000 for the
next fiscal yesr.
Senator George is the ranking
minority member on the Finance
Committee and recognized au-
thority on taxation. Senate Demo-
Gratis will hold decisive power in
settling the tax issue because, II
President Truman should veto this
last year, the Republicans will need
substantial number of Demo-
cratic votes to pass it over the veto
in the Senate.
To Map Scope of Hearings.
The President is on record for
some tax relief to individuals, but
he wanted it offset by reviving a
modified version of the corporation
excess profits tax. The House re-
fused to impose this new tax on
business. There are no indications
the Senate will be any more re-
ceptive to increasing business taxes.
The Senate committee session to-
morrow will be confined to mapping
the scope of Senate hearings, which
probably will start March l.
The Senate is due to begin floor
debate that same day on the Euro
pean Recovery Program. The plan
of Republican leaders is to have
revised tax bill ready to bring
to the floor as soon as the foreign
aid bill passes.
This means tax reduction may be
up for debate about the time millions
of taxpayers are adding up their
final March Is returns for the 1947
calendar year.
3 Main Features in Bill
There are three main features in
the bill passed by the House,
namely:
/. 1t raises the personal exemption
of each taxpayer and dependent
from $500 to $500
2. 1t permits all married couples
to split their income for tax pur-
poses which results in lower tax
levy. At present this privilege is
limited to a dozen States that have
community property laws.
3, 1t grants percentage cuts IN
income tax rates, ranging from 30
per cent in the low-income brackets
to 10 per cent at the top.
Exemption Increase Favored.
Points one and two have the
strongest support in the Senate.
The, effort to hold down the over
all loss of revenue. therefore, prob
ably Will be aimed at the percentage
fdJe GUS. = OeIldtOI SSOIsc SdtI1
some Dernocrats will want to see
the personal exemption raised to-
$700 per person instead of $500.
The path of the tax bill has been
made easier by the amendment
written by the Foreign Relations
committee into the European Recov-
cry Bill, ear-marking $4,000, ,000, 900
of the surplus the Treasury expects
to have this fiscal year for expendi-
ture on foreign aid in the next f1s-
cal year. This will limit the amount
of surplus that could be applied to
debt retirement this June. and
creates the prospect of larger sur
plus for tax reduction in fiscal l949.
Senator Millikin said one of the
first questions to be settled at to-
morrows meeting is whether the
Senate wants to branch out into
a consideration of wide variety OF
changes in excise taxes at this time,