Evening star., 1955-03-10
Republicans Ready to Battle
New Tox-Cutting Proposals

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as political as the original pro-
poSal for a $40 tax reduction, "
he charged during a House Ways
and Means Committee hearing.
He testified before the House
/ group for a bill to repeal two
Unexpectedly costly provisions
in the 1854 tax revision law.
Representative Mills, Demo
crat. of Arkansas asked Mr.,
Humphrey what he thought
about Democrats proposal and
whether he believed they also
were subject to a charge of fiscal
responsibility"
Mr.. Humphrey replied that he
had not had an opportunity to
study the proposals, but that it
seemed "sill yto say that there
would be savings" in the amounts
estimated by the Senate Demo-
Gratis. He also asserted it would
be lust as silly" to say that ex-
tension of the corporate income
tax and excise tax rates for two
years would add to Treasury re-
turns. He denounced the pro-
posals in general and the claim
of possible savings in general as
perfectly misleading"
1888 Million Cost.
The Democrats say that in
the next fiscal year. starting
July /, their modified form of
$40 tax-credit for the low-in-
come groups would cost the
Treasury only 1888 million, since
it would not start until next
January.
AS an offset, they say repeal
Of the dividend credit and ac-
celerated depreciation rule would
bring in 1855 million in fiscal
1856, leaving the Treasury with
a net gain of SO million.
| Projecting their substitute bill
to July l, 1857, the Democrats
say it would produce additional
net revenue of SCI billion.
Against this. they say that in
the two-year period their $40
tax credit for some individuals
would cost $12 billion. leaving
the Treasury with $4.8 billion
more revenue to apply toward a
balanced budget than the Eisen-
hover administration has asked
for in pending legislation.
Senator Byrd promptly labeled
these figures erroneous and fic-
titious." He pointed out the Sc l
billion claimed as a total gain
includes $3.5 billion from the
extension of present corporation
and excise rates for two years
instead of one. He said Congress
would extend these rates again
next year anyhow, if they are
needed.
No Gain Seen.
The $6.1 billion also included
an estimated saving of 81 billion
from closing the so-called "fu-
ture-expense" loophole. Senator
Byrd said this cannot be regarded
as revenue gained, since the Gov
ernment has not yet lost it, and
both houses are expected to close
this loophole in a separate bill.
Five other Democrats from the
Finance Committee sat beside
Senator johnson as he outlined
their substitute for the Eisen-
hover tax program. They were
Senators Barkley of Kentucky.
Smathers of Florida, Kerr of
Oklahoma, Long of Louisiana and
Frear of Delaware. Present also
was Senator Clements of Ken
lucky, assistant leader.
Senator johnson said the DEM
ocratic Policy Committee had
approved the substitute in prin-
ciple, but had not seen the final
detailed cost figures.
George Still Cool.
But the man who guided Dem
ocratic policy on tax bills for
many years before he took over
Foreign Relations this year
Senator George-said he does
not think he can go along with
the party leaders on their sub
stitute. Senator George said he
does not like to pre-judge taxes
so far in advance by voting tax
credits to start next January.
AS to the Democratic proposal
to repeal concessions granted
last year, Senator George said
he also is reluctant to take away
from taxpayers without a hear
ing, benefits voted them only
last year, even though he may
not have favored the benefits
when they we're adopted.
If Senators Byrd and George
stand firmly in their present
position, the debate of the next
few days will mark the first
serious division in Democratic
ranks since they regained con-
troll in January.
Blast G. o. p. Tactics.
In their minority report made
public last night the six Demo-
cratic members of the Finance
Committee backing the new sub
stitute flayed the Eisenhower
administration for having ig-
nored an unbalanced budget last
year, when a Republican Con-
gress granted tax relief to cor
porations and stockholders, while
using the deficit as an argument
this year when a Democratic
Congress seeks tax relief for
individuals.
Democrats have been smart
ing under Mr.. Eisenhower's re-
cent remark that the House tax
cut was some sort of height of
fiscal responsibility.
In describing their new plan
yesterday. the Democratic Sem
ators frequently referred to it as
a responsible" program, and in
their minority report had this
RI COW.