Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-03-13
Republicans Predict
Tax Bill Veto Should
Cuts Be Attached
BY J. A. o'Lsor


Republicans IN Congress were
convinced yesterday President
Eisenhower would veto the pend
ing tax bill II the Democrats
succeed in attaching any indi-
vidual tax cut to it.
With the showdown in the
Senate set for Tuesday, Repub-
lican Leader Knowland of Cali
fornia said he believes the Treas
ury Department would recon-
mend q veto If either the House
or Senate Democratic amend
ments are finally adopted.
Senator Knowland did not at
tempt to speak for the President.
But another highly placed Re-
publican said privately he feels
sure Mr.. Eisenhower would veto
the pending Democratic substi-
tute and Immediately ask Con-
gress to pass q separate bill con-
tinuing corporation and excise
rates which otherwise will 60
down automatically April /.
Assistant White House Score
tary Murray Snyder. asked yes
terday about predictions Of .
presidential veto. said:
THE President has adopted o
consistent policy Of not fore
casting his action on legislation
;. until it Is before him"
Still Predict Victory,
Administration hackers in the
+. Senate still predict they will beat
by a few votes the substitute Of
the Senate Democrats, which
would give each taxpayer q $40
cut. plus $40 for each dependent
other than a spouse. The Demo-
cratic substitute would more than
make up the cost Of this cut by
repeating sections Of the 1854 law
which benefit corporations and
their stockholders. It also would
extend corporation and excise
rates for two years instead of one.
But even if the administration
wins in the Senate, the battle
will not be over. The House al
ready has adopted the original
Democratic plan for a straight
cut of $40 per person-more lib
erai than the Senate version
and with no provision to raise
offsetting revenue from other
sources.
The fate of this House plan
still would have to be settled
in a Joint conference commit
tee. where the administration
would have to combat the nor
NAL tendency of the two Houses
to settle their differences by
compromise.
Move For New Vote Seen
If the administration forces
win in the Senate Tuesday they
probably will try to get the
House to take another vote on
the $40 per person cut, in the
hope of reversing its earlier APP
proval of that amendment. The
previous vote was 210-205.
If they fail in this move, the
bill would be in the hands of a
small conference committee,
where the choice would be be-
tween compromise on some
thing less than $40. or a dead |
lock A deadlock would mean
that on April l excise taxes on
alcoholic beverages, tobacco, au-
tOmobiles and gasoline would !
drop. and the income tax rate /.
on corporations would go down
from So to Al per cent.
The corporation rate could be
re- enacted later without loss of |
revenue, since returns are filed
annually. But observers differ
on whether Congress would be
able to re-impoSe overtime
counter excise rates after they
had lapsed for a period of days
or weeks.
Question On Withholding.
There was speculation yester-
day as to whether the $40 Demo-
cratic tax credit could be re-
f1ected in lower withholding taxes
starting January /, or whether
it could be deducted only when
returns are filed at the end of
the year, which would be April,
1867.
One Democratic spokesman
said it could be applied to with
holding, under regulations to be
worked out by the Treasury. |
But Senator Byrd, Democrat, of
Virginia, leading the opposition
to any tax cuts at this time, |
said he thought that would be
difficult to work out.
8 He pointed out that the full
reduction is not intended to go
to families which benefit from
the income-splitting feature in
joint returns, and said this would |
be difficult to determine until |
returns are filed If the cut |
goes through and can be applied
to withholding tables the $40
credit would amount to 81 cents
a week for an individual tax
payer. A taxpayer With two
children would get $40 or about
rs cents a week change in his
Withholding rate. Democrats
point out. however. that the
credit would take some low in
come wage earners off the tax
roles.