Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-03-19
Democrats Pin
Income Tax Cut
Hope on Senate
Higher Exemptions
Seen by Leaders as
Campaign Issue
By Robert K. Welsh
By Robert K. Welsh

lican congressional leaders today
looked to the Senate-and be-
yond to the November elections
Ito chart the future of House.
approved tax revision bill.
President Eisenhower was
highly gratif1ed at the House
action yesterday and hopes that
the Senate likewise will approve
the measure, the White House
reported.
James C. Hagerty, preSiden-
tial press secretary. told report
ers the President believes this
bill and the rest of the tax pro-
gram is urgently needed for the
program which the administra-
ton has advanced for the well
fare of all the people Of our
country"
The administration won a no.
table, although uncomfortably
close, victory for its tax program
when the House, 339 to 80,
adopted a vast measure revamp-
ing the Federal tax structure.
But passage came only after the
bills hackers barely beat. 210 to
204, a Democratic drive to in
crease personal income tax
exemptions by 500.
Cost of Proposals.
That Democratic proposal
would have cost the Government
an additional $2.4 billion a year
in revenue. The bill would re-
suit in a possible revenue loss Of
$1,397 100000 next year by pro-
viding varied tax relief for sew
eral million individuals and busi-
nesses. It would enable the
Treasury to keep about $1.2 bill
lion by continuing for one year
the So per cent corporation in
come tax rate which otherwise
would drop to Al per cent April
l. The net loss to the Govern
ment therefore would be $197
million next year.
In the Senate the bill will en-
counter a perhaps even more de-
termined Democratic attempt to
tack on an individual income tax
exemption amendment. Senator
George, Democrat of Georgia,
favors raising such exemptions
from the present 5000 to $500
next year and $1,000 thereafter. :
Democrats Undismayed.
House Democrats in general
today seemed comparatively un-
dismayed by their setback. Sew
eral remarked that the tax issue
is almost certain to be a major
political issue next fall. They
predicted that Senate will not
act on the revision bill until May
at the earliest.
BY that time the national eco
nomic picture may be clearer and
the administration itself may
soften its current opposition to
income tax relief of the size and
type advocated by the Demo-
Gratis, they speculated. A House
Democratic leader said his COL
leagues in that chamber still
occupy a strong position, "po.
litical and economic" because
no matter what happens in the
Senate they are on record al
favoring the income tax exemp-
ton move. He predicted that
the "tax philosophy battle" be.
tween the two parties will bs
carried not merely into the
Senate debate but to the voter.
next fall.
Vote Claims Conflict.
Representatives Kirwan OF
Ohio. chairman of the Demo
cratic Congressional Campaign
Committee, said that as a result
OF the tax vote he has raised
from Is to so his estimate OF
anticipated Democratic gains ir
the House in November. His
Republican counterpart, Repre-
sentative Richard M. Simpson Of
Pennsylvania, replied that the
tax action will bring votes tt
the G. o. P. He predicted Re.
publican gains of Is House seats
Secretary of the Treasury
Humphrey telegraphed con
gratulations to Speaker Martin
Majority Leader Haileck ant
Chairman Reed of the Hous,
Ways and Means Committee owe
the G. o. P. tax victory.
1T is fortunate for the coun
try that the House of Repre-
sentatives has acted in the long
run interests of the Nation il
approving this bill, which is tn
cornerstone of, the adn1inistra
(See TAXES, Page A-3.)