Scrap of Paper

Instead of passing it, the House might just as well have torn up the tax bill and tossed the pieces away. When the bill reached the Senate last week, the Senate Finance Committee started tearing it up anyhow, writing it over from beginning to end.

Up before the committee came Secretary of the Treasury Henry Morgenthau, who stepped out of his constitutional mildness to speak a plain forthright mouthful about defense taxes. He asked for a new bill that would bring in from $800,000,000 to $1,000,000,000 more than the $3,206,200,000 the House bill would raise. Purpose: to build up public morale with "an all-out tax program," head off inflation by cutting the public's purchasing power.

Mr. Morgenthau wanted, among other things: 1) lower exemptions ($750 for single taxpayers, $1,500 for married couples) on incomes;— 2) a stiffer excess-profits tax; 3) mandatory joint returns for husbands & wives (which the House turned down) with "appropriate relief" when both husband and wife are wage earners; 4) a simpler method of computing taxes (from a table) for small wage earners.

And Mr. Morgenthau wanted his new bill pronto.

Whether he will get it pronto is another matter. Sentiment in the Finance Committee seems to favor lowering exemptions, reviving mandatory joint returns. The Senate is resigned to a stiffer tax schedule than the House had stomach for. How big it will be, and where the money will come from, is anybody's guess.

In any case, said Chairman George, the U.S. tax structure is due for a complete overhaul in 1942.