TAXATION: Price of Passage

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Easing back in their red leather chairs one afternoon last week, homesick Senators yawned and dozed through a drearisome duet by their reading clerk and the Vice President of the U. S. Twice as fast and half as intelligible as a train announcer, the clerk rattled out the amendments by which the Senate Finance Committee had revamped the House's tax bill into something more suitable to Franklin Roosevelt. Whenever the clerk's voice dropped, John Nance Garner mumbled: ''Without objection, adopted.''

The clerk had barked out three or four of their names before drowsy Senators realized that a final vote on the tax bill was being called. Rousing, they passed it by 57 to 22, after two dull days of strictly routine exposition, strictly political debate.

To appease the silver bloc, Finance Chairman Harrison had accepted Senator McCarran's amendment turning silver back to the speculators (see p. 13). To save time he had promised to "take along to conference" a swarm of other, minor amendments. By 40 to 39 the Senate had approved Senator Borah's amendment lifting tax exemption from future issues of Federal securities. Otherwise the Finance Committee's bill had been passed intact. Bob La Follette's politically preposterous notion that the bill should be turned into a respectable revenue raiser by taxing the "little fellow" had been shrugged off with two decisive votes. Share-the-Wealther Huey Long had not even bothered to attend the session.

When the House and Senate conferees sat down to concoct a final draft of the Revenue Act of 1935, they found little to choose in the matter of revenue raising. The House bill was estimated to yield $255,000,000; the Senate bill $254,000,000. Compromising on most features, but junking completely the House's inheritance tax and the Senate's Borah and McCarran amendments, the conferees early this week reached agreements on a bill expected to enrich the Treasury by $250,000,000. Boosted sharply were individual income surtaxes, beginning at 31% on $50,000 and reaching 75% on amounts over $5,000,000. Corporation income taxes graded up from 127% on amounts under $2,000 to 15% on those over $40.000. Corporation excess profits taxes were set at 6% on profits of 10% to 15%, 12% on all over 15%. To measure profits, corporations were allowed to declare a new capital value, cautioned against setting it too high by a capital stock tax raised to $1.40 per $1,000. Upped estate taxes ranged from 2% on amounts over $40,000 to 70% on those over $50,000,000. Gift taxes were set at three-fourths of estate taxes. Holding companies were penalized by a 1½% tax on inter-corporation dividends.