Evening star., 1951-08-22
Senate Income Tax Bill
Cuts House Figure by.
S412 Million a Year
BY the Associated Press

The tax-writing Senate Finance
Committee tentatively has de-
cided on personal income tax
boost $412 million lower than that
voted by the House..
The committee threw out the
House revenue boosting plan on
individuals yesterday and adopted
a formula of it's own which con-
siderably lightens the increase in
the upper income brackets.
This formula would raise per-
sonal income levies by an esti-
mated $2,435 100000 a year COM
pared with $2,847, 100000 in the
House measure.
The committee continues its
closed-door reworking of the
| House bill today. 1t has yet to act
on the $2,855, 100000 in corpora
ton tax boosts voted by the House
or the increases in many excise
taxes.
Predictions Borne Out.
The tentative vote was the first
taken by the Senators in their re-
writing of the House-passed $7.2
billion measure.
1t bore out advance predictions
| of committee members that the
Senate would whittle down the
House figure rather than increase
it toward the $40 billions asked
by President Truman to help bal
ance the budget and hold down
inflationary pressures.
The Finance Committee formula
would put an added defense tax
on that portion of incomes now
Ileft after the individual has paid
his taxes.
Thus. it would hit with progress
siyely less impact In the higher
brackets where the present levy
consumes alarge share of total
income.
The tentatively adopted formula
would work this way:
First the taxpayer computes his
tax under existing law. Then he
Ilsubtracts the amount of that tax
from his surtax net income, which
is his income after exemptions and
deductions. Then he pays as a
defense tax 3 per cent of what is
left up to $4,000 and per cent
Of the part above $4,000.
House Formula Simpler.
4 The House had approved q
simpler formula: Each taxpayer
would add 1914 per cent to the
amount of tax he pays now.
An unofficial computation indi-
Gated the Senate plan would mean
a total income tax of $53,719 on
an individual with 100000 net
income compared with $58.401 in
the House bill and $51, ,912 at pres
ent. Thus he would be $4,682
/ better off than under the House
!. measure.
Chairman George of the Finance
| Committee told a reporter after
the tentative vote that the House
plan was ''unsound" and particu-
larly unfair to the middle brackets
Experts on the staff of the Joint
Congressional Taxation Commit
tee said the Senate plan would
help the low income brackets a
! little and the big ones a lot as
compared with the House scheme
/ They said those in the lowest
| income level subject to the Fed
eral tax would pay IL per cent
more than they do now under the
Senate plan. 1914 per cent under
| the House bill.
However, unofficial computa-
tions indicated that some persons
in the $1,000 900 brackets
would not benefit by the Senate
plan.
An example given by Colir
Il STAN, a staff expert, covered tht
case Of a single man with S.
900 gross income. His surtax net
income would be $4,000 after ex-
! emptions and deductions. His
tax under present law would be
] $818.
To compute his extra defense
tax, he would subtract the $81S
from his surtax net income, leav-
ing 3,082. o nthe first $4,000 o.
this, he would pay 3 per cent OF
, $50. On the remaining $1,082
he would pay 4 per cent or $43.28
Thus his additional levy would be
Il $103.28.
But under the House plan hi,
! tax would be $102.25, or $1.03 less