Evening star., 1951-07-11
AFL Urges Senators
To Ease New Tax Load
0nLow-|ncomeG Group
By J. A. O'Leory

Ine American Federation OF La
Dor today supported the admin
istration's plea for $40 billion
tax bill, but urged the Senate
to put less of the new burden on
small incomes.
The federation's program was
presented to the Senate Finance
Committee today by Arthur A.
Elder, tax consultant, and was in
direct contrast to yesterdays tes-
timony by the Committee for Eco
nomic Development, an organiza-
ton of businessmen. That group
argues that the House bill has
a harder impact on the middle
and higher brackets than on those
with low income.
The House bill would raise $7.2
billion from higher income taxes
on both individuals and corpora
tions, along with increases in the
existing schedule of selected ex-
else taxes.
The AFL opposed any increase
in excise taxes, or any new sales
taxes. Several business organiza-
tionS have recommended gen.
eral sales tax, either at the manu-
featuring or retail level.
Sales Tax Is Unlikely.
Present indications are the
Senate will not go for general
sales tax this year. but some
Senators believed it may have to
be considered in another year or
two if the defense program sends
total Government spending up to
a peak of $85 billion or more in
1853.
Highlights of the AFL program
included:
No additional burden on those
with net taxable income below
$1,000 a year.
Between $1,000 and $4,000, apply
the House provision for a 1912
per cent increase in the tax due
under existing law.
On net incomes from $4,000 to
$4,000. raise the tax rate per-
centage point along with the 12.5
per cent increase in the resulting
tax levy.
In all brackets above $4,000, |
add two percentage points in the
rate schedule, along with the 1875
percent increase in tax levy.
Hits Split Income Division.
The AFL complained that the
split income provision applying to
married couples who file joint re-
turns under present law works
to the advantage of married
couples in the higher income |
brackets.
The federation said the Senate
should impose no tax increase on
either single persons or married /
couples below the $500 level
until and unless the present diff i
ferential favoring married couples
filing joint returns is eliminated. |,
The AFL also recommended
some increase in the total the
House bill would take from cor
porations. It's program would pro-
duce from individual income
taxes $6.4 billion, as compared
with $29 billion in the House bill,
the additional amount coming
from higher brackets. 1t would
raise from corporation taxes $3.2
billion instead of $2.9 billion in
the House bill. 1t would bring in
$40 million from a higher capital
gains tax, making a total of $40
billion.
The Committee for Economic I
Development late yesterday gave
the Senators new tax program,
which included a S per cent retail
excise levy. Earlier the National
Association of Manufacturers ad-
vocated general excise levy, to
be collected at the manufacturers
level but passed on to consumers.
Urges No Corporation Raise. {
The substitute program pro-
posed by the Committee for Eco
nomic Development would:
/. Apply to individuals S per
cent tax on what they have left
after paying present taxes, in
stead of adding 1912 per cent to
their present tax levy. This /
would raise about $3.6 billion in
stead of $29 billion from individ-
uals.
2. Leave corporation income ,
rates unchanged, but inaugurate a
5 per cent retail excise tax, esti- !,
mated to raise $2.7 billion.
3. Retain the new withholding
tax on dividends in the House bill,
estimated to bring in 1923 million.
j. Cameron Thomson. Min 1
neapolis, MINI, spokesman for
the CED, told the Finance Com
mittee, the House-passed tax in
crease bill would hit too hard in
the high income brackets.
More revenue must be obtained
from the place, Mr.. Thomson
said. where most of the money is
in the middle and low income ,
brackets-if imitation is to be