Evening star., 1950-11-17
Labor Clashes
With Business
On Profits Tax
House Group Hears
Divergent Views on
Proposed Levy
By Cecil HoIIond


Clashing views on labor and
business were presented to the
House Ways and Means Commit
tee today in the third round Of.
hearings on an excess profits tax.
Three representatives of organ
lied labor called on the committee
to Write an excess profits tax even
more stringent than one proposed
by President Truman. The ad-
ministration has suggested an
excess profit tax carrying rate
OF rs per cent and estimated to
produce 81 billion a year to help
meet costs of the country's huge
re-armament program.
On the other hand, representa-
tives of business continued to
voice their opposition to such a
levy, as they did in the second
round of hearings yesterday.
They suggested numerous modifi-
cations in the administrators
proposal in the event such a tax
is imposed.
Broader Base Proposed.
Arthur Elder, tax consultant Of
the American Federation of La
Dor, suggested a tax that would
produce not less than S. billion
to Sc billion year. He agreed
with the Administrations pro-
posed rate of rs per cent tax
on business profits over a normal
earning and suggested a broad
ened tax base to bring in more
revenue.
He testified that an excess prof.
its tax, if properly administered,
would Involve no serious hard
ship to corporations at the pres
ent rate of earnings"
He added that there had been
a tendency in recent years to tax
consumers and disregard their
ability to pay.
Stanley H. Ruttenberg, director
OF research for the Congress Of
Industrial Organizations, sug-
gested a tax that would produce
between $6 and 81 billion a year"
and rate of IS per cent. He
said corporations are not bearing
their fair share Of Federal taxes.
/ Johnston Opposes Tax.
| Russ Nixon. Washington repre-
sentative of the United Electrical
: Workers Union. called for a much
more drastic tax than the Ad-
ministration has proposed. He
described Secretary of the Treas
ury Snyder's presentation of the
Administrators suggestion as "an
tin-s Sincere, luke-warrn advocacy Of
a watered-down and inadequate
proposal"
/ THE drive of business spokes-
men against the excess profits
tax" Mr.. Nixon charged, sis q
orazen and greedy effort to guar
antee continued fantastic profits
from the war program"
Eric Johnston, president of the
Motion Picture Association Of
America, told the committee that
he was opposed in principle to
an excess profits tax because he
considered it ''wasteful, infia-
tionary and productive.
He said he recognized, however,
that the committee is under a
congressional mandate to report
an excess profits bill. and therefor
he confined himself largely to
suggestions of technical and other
changes in the administrators
proposal.
Retroactivity Criticized.
One of his principal suggestions
was that the tax, If it Is adopted,
should be effective only after
December 81. 1880. President
Truman has asked Congress to
make the tax retroactive to last
July /.
Mr.. Johnston said it was difficult
for corporations to determine ex-
actly what their earnings were for
only a part of a year.
Mr.. Johnston also suggested ex-
pansion of relief provisions in any
excess profits tax measure that
may be adopted, and proposed a
means for speedier handling of ap-
Iplications for relief. He said such
applications should be handled by
a special panel of experienced
judges Of the Tax Court.
The committee scheduled more
than 20 witnesses for testimony
during the day as it rushed con-
sideration of the proposed tax bill.
1t has agreed to shut off hearings
not later than next Wednesday.
and by a vote along strict party
lines, all testimony dealing with
other possible forms of taxation