Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-01-20
3 Congressional
Leaders Attack
Tax Program
Withholding Action
Proposed by Reed
For Thorough Study
By J. A. O'Leory

py Representative Reed, Republl-
can, OF New York. to sidetrack all
tax legislation until the subject
can be studied by the best fiscal
brains" in the country.
He will ask for a special meet
ing this week of the House Ways
and Means Committee, of which
he is ranking minority member,
to decide on such study.
On the eve of President Tru-
mans submission of his 1853 bud
get message tomorrow, there were
these other developments:
l. Senator Douglas, Democrat,
OF Illinois, called for the closing
of tax loopholes to raise $l.s bill
lion before any increases in tax
rates are considered, and urged
Congress to squeeze 81 to S. bill
lion out of the spending budget.
Connally Unconvinced.
z. Senator Connally, Democrat,
OF Texas, said a study of the
Presidents economic report "has
failed to convince me of the neces-
sity of raising taxes $40 billion
as the President recommended"
8. Representative Mason, Re-
publican, of Illinois. accused Mr..
Truman Of calling for the closing
and opening of loopholes at the
same time. He said the President
made a fiat request for closing
loopholes, and In the same eco
nomic message requested changes
in the law to encourage growth
OF tax-exempt farm co-operatives.
Senator connally said, "our
people cannot stand additional
tax burdens, and I shall vote
against a general tax increase"
In suggesting action be with
held pending a thorough fiscal
study, Mr.. Reed said Congress
must determine how high taxes
can go without destroying the
Nation and the free world.
Says Limit Is Reached.
Estimating that the people al
ready are paying nearly a third of
their incomes for Federal, State
and local taxes, Mr.. Reed said:
my personal belief is that we
have reached the limit already
that we have stepped our
selves in trying to provide money
for the President to spend reck-
|lessly."
In his economic message the
President asked not only for the
closing Of loopholes, but for some
tax rate increases" He pointed
out that the Government faces de-
f1citS of So billion in 1852 and
nearly twice that much in 1858.
The tax provisions Senator
Douglas listed as loopholes, the
closing of which. could produce
SIT billion, are:
l. Depletion allowances to pro-
ducers of oil. coal, gas and other
minerals. $3.50 million.
2. Failure to apply the salary
withholding system to income
from dividends and interest, $3.50
million.
Family Partnership Provisions.
3. The family partnership pro-
visions which, he said, permit
business to split their income with
relatives, 500 million.
4. An increase in the tax rate
on capital gains, 500 million.
S. Close loopholes in the excess
profits tax to raise $500 million.
Senator Connally said he is
willing to re-examine the tax
structure to block loopholes, but
he promptly disagreed that the
depletion allowances for oil and
gas constitute a loophole.
When Congress was increasing
income and excise taxes by $5.7
billion last fall it refused to act
on most of the loophole changes
mentioned by Senator Douglas.
The Senator renewed his fight
for them in a broadcast over Ra-
dio Station WGN, Chicago.