Evening star., 1951-09-29
Conferees Start
Work Soon on
Tax Boost Bill
Senote Votes Measure
Providing Increase
OF S., ,450, 900, 900
BY ]. A OLeory

House and Senate conferees will
60 to work next week on the final
terms of the $5.45O,0O0, 900 tax
bill which passed the Senate last
night.
The House voted earlier for
$7.2 billion. Conferees usually
meet on middle ground, which
means that within a few weeks
President Truman will get a new
tax law of a little more than
$6 billion, instead of the $40 bill
lion he asked for.
This is the third increase since
the start of the Korean war, and,
when in full operation, will bring
to SIG billion a year the total of
new revenue. Counting existing
taxes, this bill should bring COL
lections in the current year close
to SOS billion.
Exact Effect Uncertain.
The exact effect of the measure
on individuals and corporations
will remain uncertain until the
conferees settle the differences be-
tween House and Senate versions.
Here are the main issues:
1ndividuals-The House adopted
q fiat 1912 per cent increase in
the tax produced by existing rates.
For most individuals, the Senate
cut this to II per cent and al
lowed the top income brackets to
use a different formula. In a full
year the House plan would collect
nerly $2.9 billion, the Senate ver-
sion about $24 billion.
Corporations-Both houses have
voted for top rate of So per cent
instead of Al per cent for COM
bined normal and surtax, but the
Senate bill eliminated about $500
million of the increase in excess
profits tax the House had ap-
proved.
The Senate bill carries a ceiling
of SO per cent on the amount any
corporation will pay in excess and
normal tax. On the first $25, 5000
of corporate income. the Senate
rate is 27 per cent, as against 30
per cent in the House bill, giving
some concession to small business.
Increased Excise Levies.
Excise levies-Both Houses have
voted for increases that will pro-
vduce more than $12 billion addi-
tional from the taxes on all alco-
holic beverages, cigarettes, gaso-
line and a wide variety of other
goods and services. The details of
many of these rates are still sub
ject to change in conference.
Both Houses are on record for a
liquor tax of s10.50 instead of sci
q gallon, and on beer, an increase
from So to SO a barrel.
The cigarette increase is equiva-
lent to l cent a pack, but the
Senate voted to cut the existing
tax on pipe tobacco from 18 cents
to 10 cents pound.
On motion of Senator Moody,
Democrat, of Michigan. the SEN
ate also voted yesterday to give
Santa Claus a break. 1t exempted
from the sporting goods tax the
sleds used by children, if they
are not longer than 81 inches.
Many New Provisions.
The bill contains many new
provisions, including special taxes
on illegal wagering, but the Sen
ate refused yesterday to require
race tracks to collect a 20 per
cent withholding tax on winners
under the pari-mutuel system.
Another feature of the new tax
bill on which both houses agree
would exempt home owners from
the capital gains tax on the profit
they make from selling their pres
ent dwelling, if they buy another
one within year. The Senate
made the period 13 months if a.
new home is being built.
There are also new tax levies
on co-operatives, mutual savings
banks and building and loan as
sociations.
A small group of liberals, led
by Democratic Senators Humphrey
(See TAXES, Page A-6.)