| Show Questions and Answers On New U. U S. S T Tax ax Measure WASHINGTON ASHINGTON V April 29 UP Questions and answers on the new tax bill bilI did cUd rr President Roosevelt propose a ft tax Mil hilt at this thin time timer A. A To meet the treasury's need of money with which to pay the soldier bonus finance a permanent permanent permanent perma perma- nent farm program and cover the tho loss due to o of some AAA processing taxes Q How v much money did ho he want specifically A. A He wanted I yearly yearly yearly year year- ly over oyer nine years ears to pay the bonus cost annually tor tho farm program a and over the next two or three years to cover the AAA losses Q How v did lid lie he propose to raise ralle thu money A. A He suggested a general re revision revision revision re- re vision of the corporate income tax to provide an additional annually temporary tion of ot farm processing taxes and Imposition of a windfall levy on processors who could not show that they had not poised passed sed on the theold theold theold old AAA processing taxes Intended in intended intended In- In tended to raise a total of about Q How does doe the house houle bill compare compare com corn pare with that A. A It carries out his corporate tax suggestion and the windfall ll lev levy However the processing taxes were dropped and the tho bill continues continues continues con con- temporarily the capital stock and excess profits lax taxes s. s which Mr Roosevelt wanted re repealed repealed repealed re- re pealed immediate immediately Q How much does the house howe bill bUl ral raise e A. A The corporate tax is intended intend intend- ed to raise about annually an an- the windfall tax a 8 total of ot and the capital stock and excess profits profit taxes during tho period they are retained Q What will be b done to meet the difference between what Mr 1 Roosevelt wanted and the bill bUt provides A. A The first year ear yield is estimated estimated estimated esti esti- mated at or a A. littlemore littlemore little more than Mr Roosevelt asked The bill may be changed in the senate to provide more revenue or the problem may go over until the next session of congress Q What is this new corpora corporate tax or A. A It is BJ J very complicated change in tax law Jaw for corporations corporations corporations corpora corpora- requiring many of the bills bill's pages to explain In simplest terms it provides that the greater 1 the percentage of ot profits proms retained by a corporation as AI reserves the higher the tax rate it must pay Q now How does that differ from froin the present law A. A The present law Jaw provides a flat graduated lAx tax of ot 12 to 15 lIS lISper per percent cent on Q How IIo Ift Is this tax chan change e In Intended Intended Intended In- In tended to affect collection of ot revenue revenue reve reve- nue A. A Its sponsors believe it will force corporations to pay payout out outmost outmost most of their earnings in the form torm tormo o of dividends Then the tho individuals the dividends would receiving pay the regular 4 per percent cent income tax lax rate on the money Q Dot Dom that mean corporations will pay hl higher taxes r A. A Not according to the treasur treas treas- ur ury The treasury estimates that the taxes of ot of or the corporations expected to file re- re turns t for 1936 6 will be bo dower t thai aJ paid previously Q cl How will the tho change affect flectA a small taxpayer A. A It means that any dividends he rece receives receives receives' ves will now be liable to income taxes Q How about small corporation corpor- corpor tion which have no large IU r rp r serves serve A. A The treasury states slates that Under under under un un- der the new rates small co corp corpora corporations p r can retain as much as az 40 0 per c cent nt of or their profits each ye year r rand and still sUll pay considerably lower taxes than at present Q g. What Is the effect on larger larcer companies A A. A They are liable able to high higher r rates even though the actual percentage percentage per per- of earnings retained is no mio no larger than in the case of a small compa company Q What about companies which have large d debts or are forced Into receivership A. A They hey receive special pedal treatment treatment treat treat- ment under the bill blU A flat rate of 15 per cent is provided on funds set aside under certain conditions to amortize debts A A. similar rate is pr provided for companies in re re- re Q Is special treatment provided provid provid- ed for any other companies 1 r A. A Yes banks and Insurance companies pay a flat 15 per percent cent rate and foreign corporations are taxed 22 22 per rent cent on their American Amer Amer- ican income Q What hat In Is the windfall t tax x A. A That is a a. levy leyy of 80 80 per cent centon on funds accruing to processors through avoidance o of processing tl taxes ces |
