Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-06-19
Democrats Plan Fight
In Senate for Bigger
Income Tax Benefits
By Robert K. Welsh

Democrats disclosed today
they will wage a Senate floor
fight to amend the administra-
tons SIS billion tax revision
bill by a 500 increase in per-
sonal exemptions or by allowing
each taxpayer a $40 annual
credit.
This plan was outlined by
Senator George, Democrat, of
Georgia, as the Senate prepared
for debate, probably next week,
on the 875-page measure. re-
ported out late yesterday by the
finance committee.
g. Senator George and other
Democrats on the committee had
considered trying to have the
bill reported out with additional
income tax relief for individuals.
They decided instead to make
the attempt in the Senate itself.
Predicts Approval. ~
Senator Millikin, Republican
of Colorado. the committee
chairman, predicted the Senate
would accept the bill about AS
reported. The measure, giving
tax relief to several million in
dividuals and corporations. was
passed by the House almost two
months ago. AS approved By the
Senate committee it remained
substantially in line with the
House version and with recon-
mendationS of the Eisenhower
administration.
Besides providing tax cuts
totaling approximately $1,477,-
100000 for individuals, as COM
pared with $3.50, OO0, 900 in the
House version, the bill would
continue for one year the SO per
cent income tax rate on CORPORA
tons. That rate otherwise would
drop automatically to al per
cent. The one-year extension
would enable the administra-
ton to obtain $1.2 billion in
revenue and thus help to offset
. the drop in individual income
tax receipts.
Prefers $50 Credit Plan.
Senator George said he per-
sonally would prefer the $40 tax
credit proposal. He announced,
however, an amendment to in
crease personal income tax ex-
emptions from the present 5000
to $500 would be offered first.
This would result in a $2.4 bill
. lion reduction in individual in
come tax revenue.
The Georgian and several of
his Democratic colleagues orig
inally suggested that exemp-
tons be boosted from 5000 to
$500 this year and to $1,000 next
year and thereafter. That
would have meant a $4.5 billion
tax cut this year, and almost So
billion annually thereafter.
The White House has con-
tended the Government could
not stand such revenue losses at
this time. A 81 billion deficit
already is expected for the fiscal
year beginning July i.
Senator George said the 500
exemption increase amendment
will be offered as substitute for
one of the. most controversial
provisions in the bill. That is
the section aimed at easing dou-
BILE taxation of dividends which
corporations distribute to stock
holders. Democrats i general
have attacked that privision as
a boon to the wealthy.
# this amendment is defeated,
Senator George explained, he
will offer the $40 tax credit
amendment. Committee staff
experts have estimated that this
plan would cause a revenue drop
of about 81 $50, 100000 a year.
First Revision in 20 Years.
The bill awaiting Senate de-
bate has been described as the
first real revision of the internal
revenue laws in more than 70
years. It's House sponsor, Rep
resentative Reed, Republican, OF
New York, called it essentially a
tax reform measure. He defended
it as giving tax relief about
equally to individuals and
businesses.
Besides the provision concern
ing taxation of corporate divi-
dends, one of the most important
and controversial changes would
permit faster write-offs on BUSH
ness OUTLAWS for plant expansion
and moderniZation.
Before reporting out the bill
yesterday the Senate committee
eliminated a House provision
that would have enabled single,
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