Evening star., 1951-08-30
BY the Associated Press

proposed Snarp increases IN
the taxes on liquor. cigarettes,
automobiles, gasoline and other
common American purchases
came up for decision in the Sen
ate Finance Committee today.
The House voted excise tax in
creases totaling $1,252, ,000, 900, as
part Of it's 81 billion tax boost.
So far. the Senate unit has
whitfield about 81 billion off the
House total, principally from in
dividual and corporate income
taxes. If the Senators decide to
try to recoup any of this, the
excise field offers the last big
chance.
The House went less than half
way toward meeting the admin
istration's recommendation for
a SO billion increase in excuses
(sales taxes.
Liquor Taxes Increased.
Under the House bill, the tax
on whisky and other hard liquor
would rise from SO a 100-proof
gallon to $10.50; on beer from So
a barrel to SO; on cigarettes from
Z cents pack to 8; on gaso-
line from w to 2 cents a gallon:
on automobiles from Z per cent
OF the manufacturers price to
10 per cent.
The taxes on wines would be in
creased, and additional household
appliances would come under a 10
per cent manufacturers levy.
Beyond this, the House reckoned
on taking in $400 million a year
from a new 10 per cent tax on the
gross take of bookmakers and
numbers" operators.
After its cuts in individual and
corporation income taxes, the Sen
ate Finance Committee yesterday
voted for $50 million more rev.
enue to be derived from taking
mutual savings banks, building
and loan associations, and some
noW-exempt co-operatives.
New Fields Included.
Staff experts said the changes
would bring in 500 million a year
from 600 mutual savings banks
and SOS million from $3.50 build
ing and loan associations, both of
which are untaxed at present: and
SIS million to $40 million from
thousands" of now untaxed CO.
operatives.
In each case. regular corpora
ton rates would be applied, with
certain deductions permitted.
The committees decision on CO.
operatives hits the biggest mutual
organizations hardest and in gen.
eral leaves most small rural CO.
ops exempt from Federal taxes.
Secretary of Agriculture Bran
nan criticized the move to tax
any farm co-opS. In a statement,
he said the action would reverse
a Government policy of 80 years
standing.
"The Government would now
begin to penalize farmers CO.
operatives which are successful
and have enjoyed normal growth"
Mr.. Brannan said. Establishment
OF new co-operatives would be, for
all practical purposes. prevented"
Deductions Permitted.
Among the deductions which
would be permitted under the
committee action are these:
Mutual banks would be allowed
to subtract from their taxable
Income all dividends and interest
paid to depositors or credited to
their accounts. They also would
be permitted to set aside, tax
exempt, a fund to make UP for
losses on loans, based on actual
experience over a 20-year period.
Savings and loan societies like
wise could deduct from their tax
base all interest and dividends
paid to depositorS. plus a bad
debt reserve.
Co-operativeS now specifically
exempt from taxation under pres
Ient law would retain that exemp-
tion with regard to patronage div
idends only if those dividends are
Cd paid in cash or merchandise
within rs days after the year in
which the patronage occurred, or
(2) If the dividends are paid in
the form of binding obligations
payable within two years and
bearing at least 3 per cent in
tereSt.
Would Deduct Dividends.
Under current Treasury rulings,
co-ops subject to taxation are per-
mitted to deduct from their tax
able income patronage dividends
that are "allocated" to members,
even if they actually are retained
by the cooperative for expansion
of the business.
Coop members would be liable
for individual income tax on the
face amount of such dividends
that represent income to them.
The Finance Committee also
decided yesterday to make it's
81, ,280, 100000 corporation tax hike
effective January /. 1851. That
is the same date the House chose