Evening star. [volume], June 09, 1940, Page A-5, Image 5

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
Tax Bill to Prevent
War Millionaires
Promised in January
House Committee Also
Approves $1,004,000,000
Levies for Defense
(Continued From First Page.)
to $2,000 for married persons, and
from $1,000 to $800 for single per
sons.
A 1 per cent increase in each rate
of the corporation tax schedule,
making this schedule start at 13)j
per cent on $5,000 of net corporate
income, and go up to 19 per cent
above $25,000. The old range was
from 1213 per cent to 18 per cent.
Increased rates in the surtax on
Individual incomes in the brackets
from $6,000 to $100,000. The surtax
schedule starts just above $4,000
and goes up to $5,000,000, and the
committee explained that, while
the bracket rates were not changed
at the top and bottom, the lowering
of the personal exemptions will have
the effect of making some increase
in the bills of all groups affected
by the surtax.
10% Supertax Approved.
In addition to these base-broad
ening features, the committee also
approved the new 10 per cent su
pertax. which is to be added to
regular normal and surtax. For ex
ample, if the lowering of a mar
ried person's exemption by $500 adds
$20 to his basic tax bill by reason
of the 4 per cent normal rate, he
will still have 10 per cent added
to' his total normal tax. An ac
companying table shows how this
would work out in the case of per
sons whose income runs up into
the surtax brackets.
The last minute changes in ex
cise levies yesterday took only about
$2,000,000 off the tentative revenue
total of $1,006,000,000, and were an
nounced as follows:
The proposed 3-cent increase in
the 18-cent tax on plug and twist
tobacco was eliminated.
The proposed increase from 3 to
per cent in the electrical en
ergy' tax, which is paid by the pro
ducer on the sale price, was modi
fied to 3!3 per cent.
Retailers of distilled spirits were
sllowed an exemption of 100 gallons
in applying the new' 75-cent-per
gallon floor tax.
Wine Tax Starts July 1.
The new taxes on wines were
made to start July 1 instead of the
date of passage, which may result
In no material difference.
In the case of beer the floor tax
was made to apply only to whole
salers. which has the effect of mak
ing the increase from $5 to $6 a
barrel on beer effective July 1.
In the case of the increase on
playing cards, the floor tax feature
*as dropped.
The increase from 30 to 40 cents
In the tax on rectifying spirits
was eliminated.
The bill inceases the public debt
limit by $4,000,000,000 for the defense
program and the new taxes are de
DUNKERQUE.—WHEN BOMBS RAINED ON DUNKERQUE—This official French picture shows,
according to censor-approved caption, a structure in Dunkerque an hour after an explosive bomb
had struck it, blowing down walls and setting fire to the debris. The bombing, apparently, took
place during Allied evacuation of Flanders. _A. P. Wirephoto.
signed to go toward amortizing this
debt.
Full Limit Not Reached.
In serving notice on the country
that the pending measure is not
the full limit to which the committee
proposed to go later on in financ
ing national defense and recaptur
ing excess profits in war industries,
Chairman Doughton said the fol
lowing statement was agreed upon
unanimously:
"During the executive sessions
there have been discussed proposals
to provide special amortization for
national defense industries and to
provide for imposition of excess
profit taxes. These two measures—
each in itself requiring a compli
cated and exhaustive project—must
be considered together.
“It is the desire of this committee,
which is favorably reporting a bill
which will enable a larger proportion
of our citizens to participate in the
Comparison of Taxes
Table Presents Picture of What
Proposed Surtaxes Will Add
i
The present 4 per cent normal rate on all taxable net income remains
unchanged in the new tax bill approved yesterday by the House Ways
and Means Committee and, as at present, the surtax starts above $4,000
of taxable income.
The following table gives a comparison of present and proposed
surtax rates. While there are no changes in the surtax bracket rates
below the $6,000 level or above the $100,000 level, officials explained that
the taxpaying groups below and above those points alsojwill pav more,
because the lower personal exemptions will have the effect of increasing
the amount of net income subject to surtax all along the line.
The table follows:
EXISTING LAW PROPOSED
. , „ Total Total
Amount ot Surtax Surtax on Surtax on
Net Income. Rate Higher Rate Higher
Amount. Amount.
(%) (%)
*0-4.000 __ *. __ *
4.000- 6.000 4 80 4 80
6.000- 8.000 5 180 6 200
8.000- 10,000 6 300 8 360
10.000- 12,000 7 440 10 560
12.000- 14,000 8 600 12 800
14.000- 16.000 9 780 15 1,100
16.000- 18,000 11 1,000 18 1 460
18.000- 20.000 13 1,260 21 1,880
20.000- 22,000 15 1.560 24 2 360
22.000- 24.000 17 1.900 27 2 900
24.000- 26,000 17 2,240 27 3 440
26.000- 28,000 19 2.620 30 4,040
28.000- 32.000 19 3.380 30 5 240
32.000- 36.000 21 4.220 33 6 560
36.000- 38.000 21 4,640 33 7,220
38.000- 40,000 24 5.120 36 7.940
40.000- 44.000 24 6.060 36 9,380
44.000- 45.000 27 6.350 40 9,780
45.000- 50,000 27 7,700 40 11,780
50.000- 56,000 31 9,560 44 14,420
56.000- 60.000 35 10.960 44 16.180
60.000- 62.000 35 11.660 47 17.120
62.000- 68,000 39 14,000 47 19.940
68.000- 70.000 43 14.860 47 20,880
70.000- 74,000 43 16,580 50 22,880
74.000- 80,000 47 19.400 50 25,880
80.000- 90.000 51 24.500 53 31,180
90.000- 100.000 55 30.000 56 36.780
100.000- 150,000 58 59.000 58 65.780
150.000- 200.000 60 89.000 60 95.780
200.000- 250.000 62 120.000 62 126.780
250.000- 300.000 64 152.000 64 158.780
300.000- 400,000 66 218.000 66 224.780
400.000- 500.000 68 286.000 68 292,780
500.000- 750,000 70 461,000 70 467,780
750.000- 1,000.000 72 641.000 72 647,780
1.000. 000-2,000,000 • 73 1,371,000 73 1,377.780
2.000. 000-5,000,000 74 3.591.000 74 3,597,780
5.000. 000 and up 75 75
Here is how the new tax structure would work, using, for example, a
married man with *10.000 net earned income:
Normal tax—After deducting $1,000 for the 10 per cent credit on
samed income and $2,000 personal exemption, he would pay the 4 per
cent normal tax on a $7,000 base, or $280 normal tax.
Surtax—To compute the surtax he can deduct personal exemption,
but not the earned income credit, so the surtax would be based on $8,000.
As shown by the table above, he would pay nothing on the first $4,000,
4 per cent on the next $2,000, or $80, and 6 per cent on the remaining
$2,000, or $120, making the surtax $200.
Supertax—The new defense revenue bill also levies a flat 10 per cent
supertax on regular income taxes. In this illustration the normal and
surtax amount to $480, to which the supertax would add $48, making the
total tax $528.
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responsibility of providing an ade
quate national defense than has
ever been the case before, that there
shall not be an opportunity for the
creation of new war millionaires or
the further substantial enrichment
of already wealthy persons because
of the rearmament program.
May Be Retroactive.
“Accordingly, we have instructed
our technical assistants and the ap
propriate Treasury officials to ac
celerate their work in these two
fields, so that bills will be pre
pared for submission not later than
the opening of the next session of
Congress, which, if passed by the
Congress, may become retroactive
and applied to income earned dur
ing the calendar year of 1940, or may
become effective on any othtr date
which Congress, in the light of in
formation it then possesses may
deem advisable.”
After reporting the pending bill
to the House tomorrow, Chairman
Doughton is expected to ask the
Rules Committee immediately for
a rule to take the measure up
Tuesday, with passage expected be
fore the end of the week.
Chairman Harrison of the Sen
ate Finance Committee is known
! to have been gratified by the action
of the House group in broadening
the bill from an original $652,000,
000 yield to approximately the bil
lion-dollar mark. He indicated yes
terday he believes the Senate's
work will be lessened by what the
House subcommittee did.
War Profit Amendment.
While the House committee was
deliberating yesterday. Senator
Bone. Democrat, of Washington,
author of one of the separate war
profit bills pending in the Senate
since last year, had predicted an
amendment along that line would
be offered when the new revenue
measure reaches the Senate. Even
if adopted, however, the Bone plan
would not take effect unless the
United States became involved in a
war. If that occurred it would be
designed to recapture net profits,
from whatever source, according to
the authdr.
Some Senators indicated yester
day, however, they would contend
that to attach war-profit legisla
tion to this defense tax bill might
be misconstrued at this time. Forty
nine other Senators joined Senator
Bone in signing the bill w’hen it
was introduced in 1939.
It is more than likely, however,
that the action taken yesterday by
the House committee in ordering
preparation of a later excess-profits
law will make it easier for Senate 1
leaders to prevent major changes
in the pending tax bill.
Connally Willing to W'ait.
Senator Connally, Democrat, of
Texas, who also has had pending
for some time a separate bill to
take the profits out of war, said
yesterday he does not want to delay
the pending program and that un
less the committee favors it, he is
not inclined to press his measure
now. He pointed out that Congress
could act quickly on a war profits
bill if the need arises.
Senator La Follette, Progressive,
of Wisconsin, who has been a past
advocate of broadening the income
tax base, was not prepared yesterday
to say what amendments he may
offer to the House plan, except to
indicate he thought that the lower
ing of the married persons ex
emption from $2,500 to $2,000 should
be accompanied by an extension of
the age limit for dependent children
from 18 to 20 years.
In addition to creating about 2.
000.000 new taxpayers by broaden
ing the income base, the bill would
result in the filing of returns for ihe
first time by approximately 6.000.000
citizens who may or may not have
any tax to pay. This is accom
plished by requiring returns from
all single persons with $800 gross
income and married persons with
$2,000 gross income. Returns are
required now on $5,000 of gross in
come. or $1,000 net if single, and
$2,500 net if married.
Santa Claus in Politics
MARSHALL. Mo., June 8 iAV—
Santa Claus is going into politics.
Santa Claus, a minister-laborer here,
has filed as a candidate for State
Representative on the prohibition
ticket.
HEAR
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test of your bearing
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3 Years to Pay
Allies Widen Buying
Of U. S. Materials
As Peril Grows
Purchases Expanded
To Fields Other Than
Aircraft and Tools
By the Associated Press.
NEW YORK, June 8.—Allied war
purchasers, who have heretofore
concentrated mostly in aircraft and
tools, now are tapping United States
industry for an assortment of other
weapons and materials.
Wall Street sources said today
British and French agents suddenly
appeared to have widened their
range of orders and inquiries to
speed equipment plans and replace
losses. Total orders placed since
September are estimated at $1,300,
000,000 now, and the figure is ex
pected to grow rapidly.
The new German drive, it was
pointed out, threatens important in
dustrial sectors in addition to those
already engulfed by the Nazi ad
vance in Northern France and the
Low Countries.
Pewder Plant Purchased.
High-speed marine engines, shells,
increased steel tonnage and a big
powder plant at Memphis to supply
Allied needs have been purchased
recently.
An atmosphere of intensified ac
tivity pervades the big British and
French buying offices in the down
town financial district, close to the
headquarters of many of the Na
tion's industrial concerns.
Of the estimated $1,300,000,000
Allied orders the overwhelming bulk
thus far has been for aircraft and
accessories.
Airplane contracts signed or in
early prospect approximate $1,200,
000,000.
Probably $700,000,000 in contract
ed orders, mainly aircraft, have been
delivered by the manufacturers.
More Plane Buying Expected.
To avoid giving the enemy infor
mation, spokesmen for the commis
sion purposely have been vague, al
though specifying that “more than
8,000 warplanes" have been ordered
in this country.
They also indicated t^iat accelera- j
tion in Allied buying may be
expected.
Steel circles have been counting
on heavier Allied buying of finished
i products. Rumored in trade sources ■
were negotiations for purchase of;
railroad cars suitab'e for heavy gun
mountings.
Provided plants can be found for
quick adaptation to war equipment,
substantial orders may be placed for
tanks. Idle rail equipment facilities
are considered among the best
adapted for mechanized war equip
ment manufacture. Negotiations are
under way for the purchase of “auto
motive" equipment, presumably in
cluding tanks, to overcome the Ger
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And complete line ol standard
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Shop at the friendly store—
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M. Wurtzburger Co.
901 G St. N.W.
CLEARANCE
SPINET and UPRIGHT
PIANOS
SHONINGER plain case practice ;
upright (used)-$100 i
WINTER—Studio upright al
most new. Very special ot :
only -$145 :
HUNTINGTON —One of the j
newest full 88-note spinets i
of this well-known make.
Mahogany finish_$150 i
HUNTINGTON — New, very j
popular spinet model that j
sells for $275. One floor i
sample .. _. -$175 ;
HUNTINGTON—New moderne !
style spinet regularly $275.
One display model at.-$198 \
BRADBURY —A lovely little j
spinet of a very fine moke.
List price, $325. One ma- ;
hogany finished model, $235 ?
STORY Cr CLARK—Their $350
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sample only ot-$265 i
MUSETTE — Beautiful console I
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burl walnut. Wasi
$385 -$265 j
KIMBALL — Consolette type ;
spinet only very slightly used.
Was $395 _$275 |
CABLE — An unusually well- j
toned spinet that we sell reg- ;
ularly at $375. One display ;
piece only'at-$275 I
BALDWIN—The famous Aero- j
sonic spinet model that sells i
ot $395. One slightly used j
instrument, reduced to $295 j
CHECKERING —One of their
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Was $495-$445
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man superiority in armored motor
divisions.
Lack of Credit Is Obstacle.
Outside aircraft and tools, a vari
ety of products ranging from motor
trucks and Missouri mules to field
glasses have been purchased. But
in the aggregate these have been
small compared with the huge orders
dangled before airplane and aviation
engine makers.
Obstacles to massive buying of war
equipment in this country chiefly
are these:
(1) A desire by the Allies to rely
on their own home and empire re
sources as much as possible in the
absence of credit in the United
States.
(2) Reluctance of American man
ufacturers to spend for plant ex
pansion or retooling to handle
war orders because of uncertainty
whether they would get enough busi
ness to recover capital costs.
Complicating the problem for the
Allies, temporarily anyhow, is the
United States’ projected $5,000,000,
000 defense program.
“The United States is magnifi
cently equipped to turn out automo
biles, radios, bathtubs, machinery of
many kinds,” commented a Brit
isher, who has been observing the
Allied buying. "The problem is
adapting your industry for manu
facture of tanks, guns, explosives,
airplanes.”
Men 63 and 29 to Race
5 Miles Barefooted
B> the Associated Press.
MEMPHIS. Term., June 8 —Any
thing for sweet charity seemed to
be the motto here today as plans
progressed for tomorrow's "goofie”
race.
A former candidate for Congress,
Tom Collier, -63, will race 5 miles,
barefoot, against Davis Bell, 29,
president of the Paterson (N. J.)
Athletic Club and a Wall Street
statistician.
Aside . from setttling a racing
dispute started between Collier and
Bell in Washington last winter, the
race will aid the Underfed Babies’
Milk Fund campaign.
Australia railways now employ
100,000 men.
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910 14th St. \.W. NA. 8677
President Roosevelt
And Manhattan Dock
Today With Refugees
2,634 Fleeing War
Include Both Americans
And Foreigners
By the Associated Press.
NEW YORK, June 8 —Two Amer
ican liners neared New York to
night with 2.634 humans aboard
driven by the terrors of modern war
from their European abodes to the
safety of the United States.
The President Roosevelt was
scheduled to dock at 8 p.m. <E. S.
T.) Sunday with 720 passengers,
most of them Americans. They in
cluded Rhodes scholars, students
who had been studying for the
priesthood in Italy, children sent
here for the duration of war, rela
tives of consular officials, and Amer
ican businessmen who went abroad
to make contracts with the Allies.
They boarded the ship at Galway,
Ireland, after the State Department
ordered the vessel from her Bermu
da run for the emergency voyage.
The sleek Manhattan radioed she
would dock at 3 p.m. (E. S. T.) Mon
day with 1,914 passengers from Italy,
half of them aliens, mostly Jews,
who booked passage before the
State Department ruled that Amer
ican citizens must be given pref
erence.
S. 5. Washington
On Way to Lisbon
By the Associated PreSs.
ABOARD S. S. WASHINGTON, at
Sea. June 9 (Sunday) —This United
States liner, with some 900 Amer
ican refugees from warring Europe
already aboard, was en roufe today
from Le Verdon. France, to Lisbon
to pick up more stranded Americans.
The ship then will proceed to
Galway, Ireland, for another group.
Capt. Harry Manning said the
Washington would not touch at
Genoa and Naples as originally
scheduled. Seventy-four passengers,
of whom 64 had booked passage to
Genoa, were trying to arrange for
visas to permit them to debark at
Lisbon and proceed to their desti
nations in various countries.
Passengers were not allowed
ashore at Le Verdon, where the
Washington docked Thursday morn
ing, and nightly blackouts were en
forced. Capt. Manning said that
French officials rigorously inspect
ed the ship’s crew without finding
any suspicious characters among
them.
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while you ore summering on the porch
Here are three Rattan groups that combine
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they have been made expressly for us and as
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Three Pieces—Settee and two Chairs
On display in the "Sloane Garden”
Attractively designed and built for comfort and service.
Upholstered in sail cloth, fabricoid or gaily colored water
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■ 711 TWELFTH STREET |