Evening star., 1950-08-08
Leaning
To MuIti-bi|Iion
Tax on Profits
O'Mohoney Will Seek
Anti-Profiteerine Levy
On Corporations
BY the Assoeiotsd Press

~ Hf~ NSsSe'o'Uo T'vSS
Close associates said today Pres
ident Truman has made up his
mind to ask Congress for a multi
billion dollar excess profits tax on
corporations.
This word reached Capitol Hill
as some members of his own party
threatened to go beyond the
President and tack on an "anti-
profiteering" levy on the IS billion
first installment" general tax
boost which the President request
ed to help pay for arming against
Communist aggression.
Mr.. Truman did not mention an
excess profits levy in his first re-
quest for more taxes at the OUT
break of the Korean war. His re-
ported intention now to call for
one was subject, of course, to de-
velopments.
A drive had developed in Con-
gress to put it into law, without
his recommendation, just as sup
port piled up for similar move
ment to give him economic pow
ers-over prices and wages
broader than he requested.
Waiting for Showdown.
Senator O'Mahoney. Democrat.
of Wyoming, and Representative
Mills. Democrat. of Arkansas.
each is waiting for the opportune
time to call for showdowns on an
excess profits tax. Senator
O'Mahoney said he has in mind
an "anti-profiteering" levy that
would collect about "a billions a
year.
It is not certain whether some
thing bordering on a stampede
ito take the profits out of war;"
as sponsors put it, viii be averted
now by word that the President
himself intends to ask for the
profits tax later.
Mr. Mills said IF Congress Is
going to authorize ceilings on
wages and prices it certainly must
put a ceiling on profits"
Meanwhile, the new general tax
bill-being built around Mr.. Tru-
mans billion request-bega1i to
take shane in the Senate Finance
Committee.
Income Tax Boost Planned.
Indications now are the COM
mittee may approve:
| /. New levieS of about $3-billion
annually on individual incomes. to
put the total near S22-billion .
year. To do this the COMMITTEES
may follow the Presidents grad
uated formula that would raise
the tax bill of some income groups
by as much as 20 per cent. or it
may call for a fiat percentage
increase across the board for all
taxpayers. The increased rates
may be effective october i, to take
about $700-million from individ-
uals In the last three months Of
this year.
2. An additional take of 81 bill
lion from corporations by increas-
ing the regular corporate income
tax rates. This would bring cor
poration taxes to about $12 billion.
The committee voted yesterday
to pick up new millions by tax
ing-at the regular corporation
rates-the unrelated business &C
tivities of educational. charitable
and other tax-exempt organiza-
tions.
Would Plug Loophole.
This plugs what Mr.. Truman
has called a 'loophole" in the
tax laws. Several such competi-
tive businesses, operated for or
by universities, now pay no in
come tax.
The President hoped to get $500
million of the SIS billion in new
revenue by loophole plugging, by
taxation of the investment income
of life insurance companies and
by a withholding tax on corpora
ton dividends that would collect
taxes on dividends that some in
dividuals now fail to report on
their income tax returns.
However, the Senate Committee
has rejected the dividend with
holding which was calculated by
the Treasury to yield SITS million.
In its action yesterday on un-
related business income of tax
exempt organizations, the commit
tee liberalized procedures already
approved by the House.
1t said the research by an edu-
cational institution or hospital.
even If done for a private firm for
pay, shall not be considered as un-
related business for taxation pur-