Evening star., 1951-05-16
Used Auto Tax Plan
aces Decision by
Committee Today
BY The AssoeiatsI Pres.

L
A proposal to tax the sale Of
used cars came up for decision by
the House Ways and Means Com
tmittee today. The committee al
ready has voted to increase taxes
lof all types about $6.52s, ,o00, 900 q
Year. II
The used car tax proposal has
aroused considerable resistance,
on the ground that a 4 per cent
tax Is paid on all new cars at the
manufacturers level. The COM
mittee has voted to increase the
new-car rate to 10 per cent, how
ever.
The bulk Of this years proposed
tax boosts would come from indi-
vidual income taxpayers ($2.9 bill
lion nett; corporation t$2,O8o,-
00G. .e00) and excise increases and
additions t$1.068. 900, 600. so far)
All Decisions Tentative.
In addition. q 20 per cent with
holding tax at the source on divi-
dends and interest Is expected to
bring in $3.50 billion from income
which otherwise might 60 unre-
ported A similar withholding tax
on dividends of co-operatives is
counted on for $25 million.
All the committees decisions
are tentative and are subject to
possible revision before the bill
goes to the House floor. AS mat
tiers stood before today's commit
tee session, however, these are
the major changes contemplated:
Individual income tax: Up,e per-
Icentage points in each bracket.
This means a $42 tax increase
for a single man drawing $4,000
Ia year before personal exemption.
and increase Of $78 for q $1,000
la-year married man with two
children, and a boost Of $678 al
year for a $25. .000-a-year married
man with two dependents.
Corporation taxes: The rate ap-
|plicable to the first $4,000 of
profits rises from as per cent toI
80 per cent; on taxable income
above $4,000 from At per cent
70 So per cent. Income in thel
:rea where the excess profits tax
applies would pay 50 rather than
~ per cent. But the Government
could not take more than 81 per
cent Of a corporations total in
come in all kinds of taxes-nor-
NAL. surtax and excess profits tax.
The present ceiling is 81 per cent
Excise taxes: Whisky, gin. bran
uy and rum, increased from 50 per
100-proof gallon to $10.5O. Beer
tax up from So a barrel to So.
Wine taxes increased by from 2 toI
rs cents gallon, depending onI
percentage Of alcohol.
Cigarette tax up q penny a pack.
from z to 8 cents. No change on
cigars, chewing tobacco or snuff.
New passenger cars and motor
cycles. 10 per cent at manufac-I
turers' level instead Of z per cent.
Buses, trucks. automobile parts and
accessories up from 5 to 8 perl
cent. Gasoline tax raised from ~
cents gallon to 2 cents.
TV Levy Also Boosted.
Teievision and radio sets, phono-
phonograph records and
musical Instruments increased
from 10 per cent (manufacturers'
leveD to Is per cent. Electric
.azorS, dishwashers, clothes dryers,
power mowers and q number Of |,
other home appliances added to
list Of articles bearing 10 per cent
tax.
The committee decided the
capital gains tax should not ap-
ply when a home owner realizes q
profit on the sale Of his dwelling
and reinvests the money In an
other residence for his own use
within a year. |.
The committee also voted to
give single persons who actually
are the heads Of families approx
mately half the tax advantage
enjoyed by married couples un-
der the income splitting provi-
sion Of the 1948 tax law.
The tax-drafting group re-
lected proposed taxes on soft
drinks, candy. chewing gum, fur
niture, floor coverings and silver
plated knives, forks and spoons.