| Show Treasury Favors Million Boost In Taxes Taffies on Corpo Corporations rations I WASHINGTON May 19 INS INS INS- The treasury Monday recommended recommend recommend- ed that corporation taxes IncludIng Including Ing ng both normal and excess profits levIes be boosted higher high high- er than previously recommended In n the new tax pro pro- gram Originally the additional burden on corporations would have been about as now proposed proposed pro- pro posed it would be approximately Assistant Secretary of the Treasury Treasury Treasury Treas Treas- ury John L. L Sullivan who pres presented present present- nt- nt ed the new recommendations to the he house ways and means commIttee commit- commit tee ee urged drastic revision of the excess profits tax levied last year yearn in n an effort to drain off arms I profits Sullivan made it plain the new treasury proposals have the approval approval approval ap ap- ap- ap of President Roosevelt After After After Aft Aft- er completing his prepared statement statement state- state ment nent he remarked The statement I have just read you was not only read by the secretary of the treas treas- treas I ury but by the president of of the United States before I delivered it Bows to Henderson The treasury apparently bowed to some extent before the assaults of Leon Henderson 0 O P M price admInIstrator administrator ad ad- administrator and Governor MarrIner Marriner Marriner Marri- Marri ner Eccles of the federal reserve board who had criticised the tentative tentative tentative ten ten- excess profits tax plan Sullivan urged congress to accept accept accept ac ac- ac- ac with modifications the e excess ex- ex 4 cess profits tax plan presented last year which was rejected He also suggested as an alternative alternative alternative tive revival of the old undistributed ed profits tax which aroused wIdespread widespread widespread wide wIde- spread opposition in congress before before before be be- fore it was repealed Under the new plan the average earnings system one of two alternatives alternatives alternatives alter alter- natives under the present excess profits tax law would be wiped out on firms earning over 10 per percent percent percent cent in one year He suggested cutting cutting cutting cut cut- ting the present 8 per cent return on invested capital which Is an exemption from excess profits tax to a minimum of 4 per cent and a maximum of 10 per cent Faces Sharp Queries Turning from corporate taxes to excess levies Sullivan was questioned questioned questioned ques ques- sharply about increases al already already already al- al ready levied against gasoline tobacco tobacco tobacco to to- bacco and other commodities Proposed excise taxes he remarked remarked remarked re re- re- re marked could be further increased on automobiles tires tubes mechanical mechanical me me- refrigerators phonographs and records and any other articles which are regarded as competing with the defense program He did not however indorse the Henderson-Eccles Henderson proposal to tax automobiles 20 per cent The committee he said could then if it saw fit cut down the proposed increase on gasoline to tobacco tobacco to- to bacco and other her commodities which do not compete with the defense program Provokes Discussion The excess profits tax provoked the most discussion during Sullivan's Sullivans Sullivans Sullivan's Sullivans Sullivan's Sulli Sulli- vans van's testimony Sullivan told the committee that at present the profits of a good many business firms are not being g touched by the tax although some e I of those profits are excess profits profit s by any reasonable standard Here is certainly a place t to o broaden the base he added Sullivan recommended that the basis for figuring excess profits tax liabilities be revised to bring bringa a larger share of corporate incomes under the tax As an alternative he suggested that the principle of excess profits taxation be abandoned abandoned abandoned aban aban- and that corporation income taxes be increased by enough to produced the desired revenue |
