He said he had not objected to removing obstacles to little business, Dut said, "the administration docs not want large and closely held corporations making large profits to be used a vehicle by a small number of their owners in order to avoid legitimate Income taxes."
He said it has been recognized that progressive taxation should apply not only to salaries and dividends but also to increases of capital through the selling of any form of property for "The new Bill," he said, "wholly eliminates the progressive tax prin: ciple in respect to these capital pro-Mts, and taxes small and large capital Profs at exactly the same rate."
The Bill, which becomes law, includes a portion of the undistributed profits tax which has been dis approved. by business but recommended by the President.
In referring to this part of the bill, the President called attention to the fact that the penalty for withholding dividends from stockholders amounted to only 2% per cent. and thus it was a matter for doubt as to whether it would completely eliminate the former tax avoidance rulings.
The President doubted that the adoption of a flat rate capital gains tax would help to force capital. into new enterprise and said that it would prove helpful to those gaining large ug and selling existing He also said that he hoped that Congress would follow a broader programme in an attempt to improve the Federal tax system—United Press. many.—United Press.
Text read from the printed page and cleaned; old type leaves the occasional error.