Evening star., 1955-03-12
Foes Forecast
.TaxCutDefeat
.ByCIose Vote
Senute Democrats
Trying to Enlist
New Support
By J. A. O'ledry

Administration supper tiers
claimed victory by narrow mar
gin today in their effort to block
a Democrat-sponsored income
tax cut.
There will be no votes taken
on the tax bill before Tuesday.
however. Over the weekend re-
cess Democrats are expected to
continue their efforts to muster
a majority for their substitute.
Word went out from both sides
to have Senators capcel any en-
gagements which might take
them away from Washington
next week.
The Democratic substitute
would give individuals in the low
income brackets a $40 tax credit
starting next year, plus $40 for
each dependent except a spouse.
Most individuals in the upper
brackets are excluded because
the relief would not go to couples
who benefit from the split income
feature, which operates mainly
above the $4,000 bracket.
Democratic Proposals.
To make up more than the
cost of this relief, the Democrats
are proposing repeal of the div
idend credit given stockholders
last year, the repeal of the new
rapid depreciation formula for
corporations and the closing Of
a loophole in last years law re-
lating to deductions for future
business expenses.
One supporter of the substitute
conceded privately that the
Democrats are still few votes
shy of majority.
The close division was further
indicated in yesterdays debate
when Senator Humphrey, Demo-
crat, of Minnesota, said, "if we
can get two more Republicans to
vote for it (the substitute) we
will get it passed"
AS of today the Republican
leaders hope they will lose only
one vote on their side. Senator
Byrd. Democrat, of Virginia,
chairman of the finance Com
mittee. is standing firmly for the
administration bill and Is ex-
pected to have several other
Democrats with him.
G. o. p. Win Seen
The Senate now stands at At
Republicans and 40 Democrats.
If these forecasts hold, the ad-
ninistration. by two or three
votes, would succeed in holding
the bill to a straight extension Of
existing corporation and excise
rates.
The debate went on yesterday
with Senators Humphrey and
Long. Democrat, of Louisiana.
criticizing tax policies of the
Eisenhower administration.
After Senator Long had made
several references to the tax
views of Mr.. Humphrey" mean
ing the Secretary of the Treas
ury, Senator Humphrey inter-
posed with this plea:
when the Senator refers to
Humphrey, will he please specify
George"
In an exchange that insued,
the two Democrats agreed that
hereafter they would refer to the
Secretary as "Trickle-Down
George" and to Senator Hum
phrey as "Percolate-up Hubert"
This was a reference to the
Democratic argument that the
administration favors having tax
relief start at the top and trickle
down, while the Democrats favor
starting at the bottom.
Many Amendments Possible
If the administration beats
the main Democratic substitute,
the straight extension bill prob
ably will pass intact. But if some
changes in the 1854 tax law are
made, it may open the door to a
variety of other amendments.
For example, Senator Will
liams, Republican of Delaware,
said that if there is to be a YEN
eral overhauling of last years
law, he may consider renewing
his fight to reduce the oil and
gas depletion allowance from
27l2 to Is per cent to conform to
most other depletion allowances.
Both sides agreed later yester-
day to limit debate starting at
noon Tuesday. The agreement
allows two hours on amend
ments, four hours on any substi-
tute and two hours on the bin as
whole. This should bring final
passage by Wednesday.