Evening star., 1951-08-28
Senators Ease Boost
In Corporation Taxes
Approved by House
BY the Assoeiaiod Pres.


The Senate Finance Committee
has tentatively voted to knock out
about one-fourth Of the corpora
tion tax increase voted by the
House.
Most of the excess profits tax
boost was eliminated yesterday
from the House-passed Sta billion
tax increase bill. The Senators
kept the five per cent increase in
corporation income taxes but Jug
gled rates to make the increase
lighter on small companies with
incomes Of $4,000 or less a year.
Even with this softer treatment,
the higher corporation levy rates
would yield an estimated $2,280,-
000, 900 a year in additional rev.
enue-$760 million less than the
House bill.
The Senators now have tenta-
lively approved cuts Of about ST.
640, 100000 in the tax increase
voted by the House.
Co-operatives Tax Studied.
II they cut excise taxes, the last
remaining big section of the bill
as sharply as they have other
levies they may well get their ver-
sion Of the tax increase down to
about $5 billion or only half the
amount sought by President Tru-
man.
However, the committee today
hopes to pick up perhaps as much
as 500 million of additional rev.
enue in field the House did not
touch.
It will study possible taxes for
co-operatives, mutual banks, saw
ings and loan and insurance
groups and others, some of which
now have certain exemption priv
ileges.
Congress was told today that 80
million students in the Nations s
schools will be assessed nearly $l3
million by the 20 per cent tax the
House imposed on fountain pens,
ball pens and mechanical pencils.
The Fountain Pen and Mechanical
Pencil Manufacturers Association
issued statement today, inform
ling the Senate that educational
groups oppose the levy.
The Senators yesterday voted to
make their corporation boosts
expire December 81, 1858, the same
date they picked for termination
OF personal income tax increases.
Effective Date Undecided.
They did not agree on the ef-
Ifective date for the new corpora
tion levies although some are said
to favor a date later than January
| /, 1851.
The Finance Committee re-
ijected the House provision reduc-
ing to rs per cent from the
present IS the percentage OF
average base period net income
to be used in computing the ex-
cess profits tax credit. The base
period Is the best three years in
the four from 1916 through l949
The House bill would REQUIRE
companies to pay an excess profits
tax on everything above rs pei
cent of earnings in the base
period.
On corporation income taxes
the Senator's agreed to accept the
House boost in the combined nor
NAL and surtax rate to SO per
cent from the present Il.
Would Help Small Corporations.
However, the Finance Commit
tee did this by boosting the nor
NAL rate from Is to 81 per cent
.and the surtax rate from % to
25 per cent.
The House had increased the
normal rate to 80 per cent and
had not changed the surtax.
CHAIRMAN George Of the Finance
Committee said the Senators
method would help small corpo-
rations with incomes Of $25, 900 OF
less because of the smaller in.
crease in the normal rate.
The Finance Committee went
along with the House in increas-
ing the combined excess profits
and normal-surtax rates to a max
imum Of 80 per cent. The excess
profits tax is 80 per cent on tor
OF the normal surtax levy.
/ The Senators also voted to ac-
cept the ceiling of 10 per cent
fixed by the House as the maxi.
mum any corporation must pay
under the income and excess
profits levies. The ceiling, now 81
Iper cent. applies to the overall
taxes.
Senator George made it cleal
that all committee votes are ten.