Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-01-21
S1.3BiIIion Tax Slash,
Most u. 5. Can Stand,
Asked by President
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were as determined as ever to
balance the budget eventually.
In the present instance, how
ever, they drew a distinction be-
tween revision" and reduction"
of taxes.
Maintaining that the whole
tax system needs overhauling,
the Presidents message ex-
planned that the recommended
revision was an important and
justifiable stop to ease tax bur-
dens. after it is completed, fur
ther reduction in expenditures
can be applied to our two OBJ
jectives of balancing the budget
and reducing tax rates." Gen. Eli
senhower wrote.
The Is proposals, the President
declared, would remove glazing
inequities. encourage production.
promote investment and simplify
many procedures. t
Substantial Cuts Seen.
While they do not change tax
rates. except in one or two in
stances, the suggested revisions
would bring substantial slashes
for some taxpayers. Some Of
the changes would become ef-
fective as soon as Congress
adopted them. Practically all
would apply to individual or
corporation income during the
1854 calendar year on which
taxes would be paid in 1855.
One of the main proposals
would ease double taxation Of
dividends which stockholders re-
ceive from corporations. This
would exempt from taxation the
first $50 of dividend income in
1854 and the first 500 in 1855,
and allow a credit ranging from
S to Is per cent over a three
year period beginning immedi-
ately.
The House committee last
week approved substantially the
same provision in its comprehen-
sive tax revision bill. Committee
staff experts estimate the change
would cost the Government
about $240 million the first year
and more than 81 billion when
the full IS per cent credit took
effect.
Proposals Listed.
Other principal proposed re-
visions in the Presidents mes
sage would:
Permit parents to claim as a
dependent a child who earns
more than $500 a year; provide
greater tax relief for single per-
son or widowers and widows
who support dependents; Jet fos-
ter children be claimed as de-
pendents; give tax allowances
for costs of paying for care Of
small children of widows or wi
bowers obliged to work outside
of the home.
They would liberalize tax al
lowances for unusual medical
expenses; remove present UNI
certainties" in tax provisions re-
lating to medical insurance and
employe sick benefits; grant
greater tax leeway for encour-
agement of pension and profit
sharing plans for employees;
modify present strict tax rules
etfecting annuities; cut from 50
to 38 per cent the corporate tax
rate on business income from
foreign subsidiaries.
They would also enable in
dividual income taxpayers to file
returns on April Is instead Of
March Is; change restrictions in
tax treatment of depreciation al
lowances for businesses; smooth
out corporation income tax pay
mentS by requiring advance pay
ments in September to December
before the end Of the taxable
year instead Of in March and
June; authorize companies to
capitalize or write off currently
their expenses arising from re-
search and development work.
Finally, they would allow soil
conservation expense deductions
up to Is per cent of a farmers
gross income and reduce the
burden of filing estimated tax
returns.