"Hell Raiser"

Although the U. S. Senate almost passed a social reform tax bill in late June, although Franklin Roosevelt ordered Congress to stay in Washington as long as was necessary to pass that important measure, although the House Ways & Means Committee three weeks ago completed its tax hearings, not until last week did Congress & country get a first look at the contentious tax rates. After a month's ado about nothing the Ways & Means Committee finally emerged from a brown study with something specific to talk about. It proposed the following:

1) A sharp boost on income surtaxes above the $150,000 level, reaching a high of 75% on incomes over $10,000,000. (Present top surtax: 59% over $1,000,000.) Estimated yield: $20,400,000.

2) A tax on corporate income starting at 13 1/4% and grading up to 14 1/4% on incomes over $500,000. (Present tax: 13 1/4%.) Yield: a penalty on bigness but no additional revenue.

3) A tax of 5% on corporation profits over 8%, of 10% on profits over 12%, of 15% on profits over 16%, of 20% on profits over 25%. (Present tax: 5% on profits over 127%.) Yield: Unestimated but probably considerably less than $100,000,000.

4) Inheritance taxes on individual legacies (in addition to regular estate taxes) with exemption of $10,000 to $50,000, depending on the relationship of the testator to the legatee and graduated from 4% up to 75% on legacies over $10,000,000. (Present tax on individual legacies: none.) Yield: $95,000,000.

5) Gift taxes amounting to three-fourths of the legacy taxes. Yield: $26,000,000.

Aggregate yield: less than $250,000,000 or about 7% of the present deficit.

Said one member of the Ways & Means Committee: "This is a hell raiser, not a revenue raiser."

Two days after drafting the foregoing tax schedules, Democratic members of the Ways & Means Committee became alarmed at reports that their bill was generally considered a dismal disappointment as a revenue-raiser. To stop this criticism they announced they would raise surtaxes not from the $150,000 but from the $50,000 level thereby pinch 7,000 instead of 1,000 taxpayers, thereby boost Federal revenue by an extra $25,000,000.

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