Senate Rewrite

By constitutional prerogative the House writes tax bills. By constitutional perversity the Senate rewrites them. Tax laws are made in conference by whichever House has the greater obstinacy. Last week the income tax law of 1934 was in its second prenatal state: Senate rewrite.

The Senate was in but moderately perverse form. It let considerable portions of the House bill stand, merely changing most significant figures and altering the amount of revenue to be collected by 100%. The House Ways & Means Committee after months of lucubration had drafted a bill whose purpose was to plug leaks in the income tax law but to raise little new revenue except what came from plugging leaks. The House bill as passed was estimated to raise U. S. revenues about $250,000,000 a year.

For years the responsible job of seeing tax bills through, the Senate rested on the patient, sloping shoulders of prosy Reed Smoot, who stood on the floor swinging columns of statistics, ponderously trying to hit the gadflies of the opposition, one of whom, with the most biting sting of all, was Senator Pat Harrison of Mississippi. Last week Senator Smoot was in far off Utah serving as a pillar of the Church of Jesus Christ of Latter-day Saints.* And Pat Harrison, no longer cast as a gadfly, had to play the heavy, as Chairman of the Finance Committee had to try to hold in check a Senate suddenly eager for taxes, taxes, more faxes. Sometimes the Progressives led by La Follette, Nye and Norris harried him with plans to soak the rich, to pile up surtaxes and estate taxes. Sometimes Couzens was after him to soak not the rich alone but all taxpayers in order to pay another small fraction of the huge expenses of the New Deal.

No longer the stinging Harrison of yore, he yielded ground to them, even yielded to Huey Long who baited him as he would have baited ten years ago. Before the Senate rewrite was complete. Senator Harrison had agreed to accept amendments that would turn the House's bill to save $250,000,000 from tax leaks into an out-&-out revenue bill to raise $500,000,000 from U. S. taxpayers.

Where the big chunks of additional revenue were to come from:

1) Reimposition of the temporary 1/10% capital stock tax and 5% excess profits tax originally imposed by the Recovery Act--to yield $95,000,000 a year. 2) A flat additional tax of 10% (to last for one year) on all personal income taxes after they have been calculated in the ordinary way--to yield $55,000,000. 3) A new estate tax, cutting exemptions from $50,000 to $40,000 and boosting the scale from a top of 45% to a top of 60% (on estates over $10,000,000)--to yield $90,000,000. 4) A boost of the surtax so that it will begin at 3% instead of 4% and make corresponding boosts in all the income brackets between $4,000 and $32,000-- to yield $7,000,000.

Eyeing the Senate's work from the far wing of the Capital, House leaders shook their heads. They thought it unwise to load down U. S. taxpayers any further-- especially in an election year. Unless President Roosevelt demands more taxes they intimated that the House might exercise its right of being obstinate in conference.

*For news of the Saints' big annual meeting last week, see Mormon 104th under Religion.

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