Evening star., 1951-10-12
Senate Approval Neor on S56.9 Billion
Fund for Notions Defense. Pose A-3

EuHu TOT tNuttOH bSIeUSes EGyS ~
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about 11A per cent in their exist
ing income levy. For those in
the brackets above $4,000, the
new tax will be 8 per cent Of sur
tax net income after deducting
present taxes.
2. Corporations will pay another
5 per cent in ordinary taxes, back
to April /, 1851, and companies
subject to the excess profits tax
will start paying more under that
heading in January.
Increased Excise Taxes.
3. Higher excise taxes will 60
in effect. probably November /.
on whisky, beer, wine. gasoline,
cigarettes, automobiles and a
variety of other commodities.
President Truman must sign the
bill by October 81 to make the
excise changes effective Novem-
ber /. A few excise rates were
modified downward.
This is the third tax bill to go
through Congress in 13 months
and is the second largest on rec
ord. In full year of operation,
the three bills will add nearly SIS
billion to the tax burden.
Even this third tax bill may
leave the Government in the red
next June 80 by at least SIS billion.
Government spending in the
current year is conservatively es-
timated at 1884 billion, and may
pass the $40 billion mark. With
out counting this third tax bill.
congressional experts figured the
Governments income this year at
about $61 billion. Because the
year is nearly half over. only
about So billion more is expected
to reach the Treasury by next
June out of the $50 billion an
nual yield from the new bill.
Truman'S Figures Cut.
President Truman asked for a
$40 billion tax bill, which would
have brought the Government
close to pay-as-we-go this year.
But neither branch of Congress
was willing to go that far. The
House voted to raise $72 billion,
the Senate $5.5 billion. They
reached a compromise yesterday.
For individuals. the new bill
boosts the tax rate from 20 per
cent to 22.3 per cent on the first
50 900 of taxable income. Each
bracket above $4,000 is increased.
as shown by an accompanying
table. At 100000 and over, the
present top rate of 81 per cent
becomes 90, but the bill carries a
ceiling of 88 per cent on the
overall effective tax on any IN
ldividual.
For wage earners, who have
most of their tax taken from the
pay envelope, the rate of with
holding will go up on Novem-
ber / from 18 per cent to 20 per
cent. In the lower salary brackets
this will collect the entire tax
due. Although the low bracket
tax is actually 22.3 per cent. the
100 per cent withholding is figured
on exemptions, but not deductions.
At the end of the year taxpayers
may itemize deductions or take
la standard 10 per cent allowance.
Since the new tax on individuals
will be in effect for only two
months of the calendar year 1851.
it. will abollnt to one-sixth of the
l1fA per cent annual increase, or
To- boost of less than 2 per cent in
the tax that otherwise would be
due for 1851.
Here is how the revenue yield in
the new bill is distributed: From
individuals, an additional $2.4 bill
lion a year; from corporations.
more than $2.3 billion additional.
and from higher excise rates, SIP
billion.
Other major changes the bill
makes in the revenue system in
clude:
A new tax on gambling, which
the lawmakers hope will bring in
$500 million a year. It imposes
a 0rper cent tax on wagers placed
(See TAXES pape A.2N