Evening star., 1951-10-20
7 axes
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than half the $40 billion additional
revenue the President asked for
this year. The $5,691, 100000 total
of the compromise bill compares
with a $7,200,000.000 increase
voted by the House originally
This was pruned down to S.. 5.400,-
000,0 in the Senate.
The new measure and two other
tax bills passed since the outbreak
Iof the Korean war have added
nearly Sic billion to the American
tax load.
A tax increase. varying only in
a few MINOR particulars from the
one finally approved. was rejected
by the House Tuesday, 204 to 157.
On the final, decisive roll call
yesterday, lat Democrats. 81 Re-
Ipublicans and one independent
supported the bill. Thirty-four
Democrats and 126 Republicans
voted against it. Some Northern
Democrats who had opposed the
legislation as putting too heavy
a burden on low income groups
were persuaded to reverse their
votes. In general, the Republicans
who opposed the first compromise
Tuesday were still against the bill
They argued the administration
should move to reduce Govern
ment spending before insisting or
additional tax money.
For the majority of Americans
the bill means an increase oi
slightly less than 1124 per cent in
their income tax obligations. Since
the bill will be in effect for only
the last two months of 1851. this
years tax bills will be about :
per cent larger than those last
year. The full effect will be felt
in 1852.
Taxpayers in the higher income
brackets have an option of con-
tinuing to pay taxes at present
rates, and adding on an extra
payment amounting to 9 per cent
of the income remaining after
payment of the tax. This alter
nate method benefits single per-
sons with incomes of $4,000 or
more a year. and married couples
above $4,000.
Here are some of the principal
excise boosts:
/ Whisky, gin. brandy and other
hard liquor from 50 a 100-proot
gallon to $10.50. Beer from So to
50 barrel. Wine up an average
Iof 1914 per cent.
Cigarettes up from 7 cents a
pack to 8 cents. Gasoline from
~ cents to 2 cents a gallon.
Automobiles increased from
to 10 per cent of manufacturers
price. Trucks and buses. from
to 8 per cent.
Electric dishwashers, electric
garbage disposal units, power
lawn mowers and other items o1
household equipment put under g
10 per cent manufacturers tax
Fountain pens, mechanical pen
ellis. cigarette lighters will be taxed
Is per cent of the manufacturers
price.
There will be a new 10 per cent
tax on the gross receipts of book
makers and lottery operators, in.
cluding persons engaged in the
numbers racket. This one prom
ises to be an enforcement head
ache for the Internal Revenue
Bureau.
In few cases. excise taxes were
cut or abolished. The tax on tele-
grams goes down from Is to Is
per cent ofthe charge. Smoking
and chewing tobacco will be taxec
10 cents a pound instead of 18
Baby oils and powders come out
from the 20 per cent retail tax.
Break For Homeowners.
Homeowners who sell Their
dwellings will not be taxed on any
profit they may receive. provided
they reinvest the gain in a new
personal residence within a yeal
of the date of sale. This provi.
sion is retroactive to last Janu.
ary /.
The bill provides two principa
increases for corporations. The
regular tax rate will go up from
Is to 30 per cent on income under
$25, 900. and from AZ to So per cent
on all over that amount. This
provision takes effect as of April
/, 1851. A second burden is an
increase in the percentage of cor
porate income subject to the ex-
cess profits tax. After July l,
1851, all income in excess of SO
lper cent of a company's average
profits for the best three of the
four years 1916 through 1949 will
be taxed as excess profits. The
present provision taxes all over IS
Iper cent.
Other features of the bill in
clude an increase in the maximum
rate of the capital gains tax from
lbs to 26 per cent; applying cor
poration tax rates to farm CO.
operatives, mutual savings banks
and building and loan associations,
and extension of tax relief to fight
ing men in combat zones.