Show U U. S. S Chamber Proposes I Repeal 0 of Profits Levy I I Penalty Tax on Corporate Earnings Held I II I Contributory to Business Slump WASHINGTON Jan 20 AP Spokesmen AP-Spokesmen Spokesmen for the United States Chamber of Commerce told the house ways and means committee today that its tax revision program di did not go far enough and that the undistributed profits tax should be repealed Fred H H. Clausen Horicon Wis manufacturer and chairman of the chambers chamber's committee on federal fi finance finance finance fi- fi nance asserted there is sound basis for our position that any penalty taxation of corporate earnings that are legitimately held not for the purpose of avoidance of the individual individual individual indi indi- vidual surtax should be repealed If the principle is accepted that employment in private business is better than t relief then we cont at the e a repeal of the surtax on dis is ib t d' d earnings should be complete e. e The tax revis revision o program a as re recommended recommended rec rec- by a ways and means subcommittee provides modification of the undistributed profits and capital gains taxes reduction of gift and estate tax exemptions and many other tax law changes Clausen described the chambers chamber's general position on the committees committee's committees committee's committees committee's commit commit- tees tee's proposals in these words Corporation income tax We be- be Continued on Pa Six Pace e Two Column Six TAX ON PROFITS REPEAL URGED Continued from Page Pae One ODe lieve leve that enactment of the proposals proposals proposals pro pro- in the main which relate to he tho corporation income tax would be preferable to maintenance of the present undistributed profits tax We do not think that these proposals pro lIt p however go far enough to conform with with- the practical situation with which they endeavor to deal Capital gains and losses We Vo believe relieve that on the tho whole these proposals proposals proposals pro pro- are better than tho the present preset treatment x of f capital capital- gains and losses Wo We do not think they reet neet the practical necessities of the situ situ- atlon Estate and gift taxes We have serious objections to some of the I proposals relating to these taxes Contributed to Slump Clausen contended there is evidence evidence evi evi- dence in the business world that the present m met e t ho d of levying the corporation income tax has contributed directly to the severity se se- se severity severity verity of the recent recession Proper Prop Prop- er alterations in that method he said would help restore business and employment and relieve some of the burdens on government It would be better for the government government government gov gov- he suggested by way of illustration to take a loss of in easing business taxes than to spend such a sum in employing W V P A workers a year Clausen asked three other chamber chamber cham cham- ber her representatives representatives' to explain in detail the organizations organization's position They were Ellsworth C. C Alvord Washington attorney Raymond T T. Berry Detroit lawyer and Henry B B. Fernald New York certified public accountant Warns of Tax Hike Clausen was advised by Representative Representative Cooper D. D Tenn that repeal repeal re reo re- re peal of the undistributed profits i i I I tax ax would necessitate imposition 0 ofa of ot ota a flat 22 2212 per cent corporate Income in income income in- in come come tax if the federal revenue yield was to be maintained Would you favor a tax of that level Cooper inquired No sir was the reply Under questioning by Representative Representative Representative Vinson D. D Ky chairman of the subcommittee that drafted the tax revision n program Clausen said he could not object to proposal proposals proposals pro pro- that corporations with incomes income's incomes incomes in in- comes come's of or less pay no undistributed undistributed undistributed un un- un- un distributed profits tax tax only only a 12 to 16 per cent income tax In his testimony Alvord asserted that unless the present recession was stopped you face an increase in relief appropriations of at least leas and a deficit of 3 Would ouId Banish Fear Confidence must be restored am and fear eliminated he said adding he commended the tax subcommittees subcommittee's revenue proposals but said he had hac hoped they would go further He too asked for repeal of the undistributed ted profits tax tax and and proposed proposed proposed pro pro- posed a flat corporate income tax In addition Alvord advised the committee to Provide a net loss carryover for two years Reduce individual surtaxes to i a maximum of 40 per cent rates cent rates of maximum productivity Reduce the tax on capital gains ito to a flat fiat 12 per cent or in the alternative adopt a sliding scale based on the period of f holding from 15 per cent as as' the maximum rate Permit a capital net loss to be carried forward for at least five years yel Abolish tax-exempt tax income on al all alII future issues by constitutional amendment |