Evening star., 1951-07-15
Senate Won't ADOPT
General Sales Tax,
George Predicts
By J. A. O'Leorx

general sales tax to avoid higher
income taxes this year, Chairman
George of the Senate Finance
Committee predicted yesterday.
Although a number of witnesses
from the business world have rec
commended some form of general
excise levy as the most effective
way to finance the defense pro-
gram. Senator George said he does
not believe it will be adopted.
This means that the Senate
committee, after about three more
weeks Of hearings, will stick toI
the conventional method of rails
ing more revenue-higher income
taxes on individuals and corpora
tions.
Committee May Change Rates.
The Senate committee, however,
may change the rate structures by
which the House voted to raise
$7.2 billion of additional revenueI
next year.
Chairman George said he has
not made up his mind on rates. |
From other sources it was learned
that there is strong likelihood
the Senate Committee will drop
the fiat 1212 per cent increase
the House added to the income
tax each individual would owe un-
der existing rates.
The Senate Committee is be-
lieved to lean more to the prin-
ciple of the Treasury plan of rails
ing the rate schedule but may
not go as far as the Treasury pro-
posal to add 4 percentage points
to all rate brackets. The Senate
is more likely to adopt a smaller
percentage increase in the rate
table.
Blanket Increase Voted.
The Treasury estimates that
adding 4 points to each rate
bracket would collect $3.S billion |
more from individuals, as COM
pared with $2.9 billion from the
House plan.
The House Ways and Means
Committee originally considered
adding 8 percentage points to each
rate bracket, but abandoned that |
for the fiat 1914 per cent boost in
the existing tax liability of each
individual, because it found this
would take less from the lower
income groups than the percent !
age change in the rate schedule.
The fiat 1919 per cent tax takes ;
more from those with incomes
above $4,000 a year.
Asked if the alternative of a
general sales tax is out of the pic /.
ture. Senator George said, Il
think it is"
He said it is still in the minds of
some committee members, but
added, since the House did not
adopt it, and in view of divided
sentiment in the Senate. it isl
practically eliminated at this
time" +
May Come Up Later.
The Georgia Democrat pre-
dicted, however, that if the de-
fense budget reaches the level now
anticipated in 1858 and another
tax bill becomes necessary at that
time, he believes Congress will "be
obliged to consider some form of
transaction of sales tax"
The Senate Committee has been
told that the 1852 spending total
of 1884 billion is expected to go
up to about $85 billion at the peak
of the defense program in 1858. If
that happens Senator George does
not believe Congress will be able
to conflne another tax bill to the
conventional process of raising
income taxes again. Senator
George added. however. that he
still hopes that by 1853 world
conditions would make possible
leveling off of the budget and tax
burden. /
Appropriation Total Awaited.
Senator George said he thinks /.
August 20 is the earliest his COM
mittee can complete its revision
of the House tax measure. 1t will
be close to September before
the Senate begins debate. |.
BY that time, Senator George
said, his committee expects to
know how much this session is
going to appropriate. and that
figure will be an important factor
in determining the size of the
tax bill. /.
After the Senate passes a tax
bill, differences with the House
will have to be ironed out in
conference. For that reason, Sem
ator George does not believe the
Government can begin collecting /.
the increase from individuals, Il
payroll withholding, before Octo-
her I