TAXES: Star Witness

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In six days of open hearings, the House Ways & Means Committee had heard 100 witnesses denounce the Administration's proposed excess-profits tax as unworkable. But for all the impression they made on the committee's Democratic majority, they might just as well have been hollering down a well.

Last week, committee members heard a witness who made them sit up and take notice. He was Congress' own tax expert, Colin Stam, a career man respected alike by Democrats and Republicans. Since Stam testified at a closed session—and kept his mouth shut afterward—there was no detailed report on what he had said. Republicans said he had testified that any excess-profits tax which siphoned off more than $2 billion—exactly half of what President Truman demanded—would be dangerous to business. Democrats denied this; they said Stam had merely pointed out that no excess-profits tax could siphon off $4 billion without taxing some "normal" earnings as well.

Whatever Stam's exact words were, they gave the committee pause. Sentiment grew for a compromise bill that would combine a mild excess-profits tax with a slight boost in the regular rates on corporation income.

Drawing up such a compromise would take time, perhaps too much for a bill to be passed even by the House before Christmas. Even if the House did pass it, most legislators doubted that the Senate would during the lame-duck session.