Evening star., 1951-03-18
Income Tax Increase
Before Fall Doubted
BY Senator George
Bv ]. A. O'Leory

by }. a. ~ LeoFy
Chairman George of the Senate
Finance Committee predicted yes
terday it may be October before
individuals begin paying higher
income taxes or heavier excise
levies.
The Senate's veteran tax auth
ority ruled out the possibility that
a new revenue law can be put
through in time to boost the
withholding rates on millions of
wage earners commencing July l,
as some experts had hoped.
He based his conclusion on in
dications a tax bill is not likely
to reach the Senate from the
House before May !, and that it
will take 80 days thereafter te
get it through the Senate.
Long Session in Prospect.
His forecast on the long road
ahead of the tax bill carried with
1t the prospect that Congress will
spend the summer on the bank of
the Potomac. wrestling with that
and a variety of other major
subjects.
Senator Millikin, of Colorado,
ranking Republican on Finance.
agreed with Chairman George
that increased income tax payroll
deductions can hardly be applied
before fall. Senator Millikin said
| it would be "a miracle" if the new
tax bill got through both houses
by July. Presumably, their rea-
soning is that if the withholding
rates cannot be changed at the
half-year mark July 1.-The
changes would start October i,
for the last quarter.
In addition to taxes, this Ses-
sion of Congress must review and
re-enact the Price and Wage Sta
bilization law, which expires in
June; pass a dozen or more ap-
preparation bills, the size of which
will determine how big the tax
bill must be and consider a new
rent law, to follow up a pending
90-day extension of the existing
law. Senator George mentioned
these as subjects that might con-
tribute to keeping Congress here
all summer.
Other Battles Pending.
In the more immediate future,
the House has the new draft and
universal military training bill, al
ready passed by the Senate, to
deal with early in April, following
a Today Easter recess, starting
Thursday.
The Senate, meanwhile, faces
an April battle over extension of
the Reciprocal Trade Agreement
law. which the House has passed.
At the start of the session the
administration called for $16.5 bill
lion of additional taxes to help
meet the mounting defense pro-
gram. The original plan was to
try to put through $40 billion
early in the session in a "quickie"
bill, and take more time looking
for the remaining $6.5 billion. 1t
seems more likely now that. what
ever is done this wear. will be in
one bill.
Senator George repeated yes
terday his belief that 1t should
be possible to cut $6 billion from
the Government spending pro-
gram. and thereby narrow the
new tax goal to $40 billion.
Substantial Reduction.
He said he is pretty sure" there
will be some substantial reduction
in the spending total. even if it
does not reach Sc billion.
The original $40 billion tax pro-
gram. as outlined to the House
Ways and Means Committee by
the Treasury month ago, called
for So billion more from higher
excise levies on a wide variety of
goods and services: 81 billion more
from individual income rates, and
50 billion additional from corpora
tions.
Senator George said 1t would
Istill be possible to make corpora
tion increases retroactive to July
l II the tax bill is delayed until
after that date. but he was not
prepared to say that would be
done.
There is one advantage to late
tax bill. If it is still in the draft
ing stage by June the Senate will
know by then how much has been
saved through reductions in ap-
preparations. and shape the new
taxes accordingly.
The House Ways and Means
Committee. which has been hold
ing hearings on taxes for q month,
will give other members of the
House chance to present their
views tomorrow and Tuesday.
Then, after the Easter recess, the
committee will call in Secretary
of the Treasury Snyder again on
April 2 for a final review of the
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