Evening star., 1953-06-23
The Political Mill
The Political Mill
Tax Extension Issue
Becoming More Urgent
6. o. P. Must Fish or Cut
Bolt as DeudIine Neurs
Rv Gould Lincoln


The Republican Congress must soon
fiSh or cut bait on the Eisenhower
proposal to extend the excess profits
expire, to next January /. Chairman
Reed Of the House Ways and Means
Committee, champion of tax reduction
without further delay, has so far tied
up the proposed tax extension tighter
than . drum in his committee. It is
generally conceded that q bill to extend
the profits tax for another six months,
as urged by the President, would pass
the House If 1t could be gotten to the
floor. Also. Senator Millikin of Colo
RADIO, chairman Of the Finance Com
mittee. is confident that the extension
bill can be put through the Senate with
out undue delay. The measure, q tax
raising bill must originate in the House.
So the question is: How to get it be-
fore that body for action?
Two reasons are advanced for the
extension of the excess profits tax. one
economic and the other political. The
first is that the Federal Government
needs the revenue that will be derived.
The second is that 1t would be poor
the excess profits tax on corporations
to lapse at the end of this month while
permitting the II per cent special in
come tax on individuals to continue
until next January. That IL per cent
tax really makes the individual tax
payer SQuirm.
Reeds Proposal.
Chairman Reeds formula is to allow
the excess profits tax to die as planned
at the end of this month, and have the
IL per cent tax on individuals expire
at the same time. But to do so would
deprive the Federal Government of
nearly 50 billion in revenue, which it
expects to receive if the excess profits
tax and the II per cent individual in
come tax both run to the end Of the
present calendar year. The President
and the Secretary Of the Treasury,
anxious to have a balanced budget in
sight as soon as possible, have turned
thumbs down on the Reed bill-and
that measure is tied up in the House
Rules Committee and Mr.. Reed can
not get it to the floor for action.
President Eisenhower himself has
called in Chairman Reed to discuss the
whole matter. Mr.. Reed has so far
remained sphinxlike about his confer
ence with the President and the outlook
for taxes Suggestions of compromise
between Mr.. Reed and the Treasury
Department crop up. One is that the
excess profits tax be continued, but
with an increase in exemptions from
the present $4,000 to 100000, so as
to make it easier on small corporations.
Another, to extend the excess profits
tax until October and have the IL per
cent individual income tax expire in
October.
Floor Action Sought.
One object is to get the tax problem
to the floor of the House in the belief
that if it is once before that body, it
can be amended so as to extend the
excess profits tax to January /, period.
Even if that is not accomplished in the
House, and q tax bill is sent to the
Senate. there 1t may be amended in
accordance with the administration
views. and finally agreed to in the
House. ~a e- p,
The date of expiration Of the excess
profits tax is drawing near. Indeed, it
would be little short of miracle II a
bill to extend that tax for six months
could be acted on by June 30. How
ever, it is explained, it probably would
not matter greatly, provided a bill ex-
tending the tax was known to be on
the way to early enactment into law.
It would not do on the other hand. to
have the date of passage Of an extend
ing bill delayed long. 1t would be diff
cult to levy a retroactive tax of this
kind on corporations. and difficult for
the corporations.
House leaders, including Speaker
Martin, continue to insist that the ex-
cess profits tax extension will go
through in the end. But just how 1t
will be gotten out of committee and
onto the floor has not yet been ex-
planned. Further. the Democrats are
eyeing the deadlock between Chair
man Reed and the administration
forces with considerable satisfaction.
Popular President Eisenhower, in the
end, is expected to have his way in this
matter. Politics as well as the need Of
the Government for revenue will play
their parts.