The Daily Alaska empire Newspaper, February 22, 1945, Page 2

THE DAILY ALASKA EMPIRE—JUNEAU ALASKA Your new Hickory Pantie is sleckest of the sleck —gently yet firmly controlling. A designer’s dream of fine elastic and lovely fabrics. Light in weight— cool and comfortable—your figure will take on new charm in a smart new Hickory Pantie. Price $6.50 i =8 (/M ,Bagffnc!i C)o. QUALITY SINCE /887 Dependable Schilling VACUUM PACKED €O FFEE KEEP YOUR (LOTHES LOOKING FRESH and Deliver “For Better Appearance” Phone 907 | Harsch Again . most other busingsses are eli:ninat- Asked. by Sension Peui discriminatios | Heard on Net | Imo@s Levy Senate Hearing Develops Info Questioning of Tax Expert | What was heralded to be an open | earing to gather expressions of >ublic sentiment with regard to the yioposed Net Income Tax Act, yes- ( erday afternoon developed mainly | nto another Senate interrogation of >rof. Alfred Harsch. Occupants of | rallery scats aided and abetted the clons in the quiz. Charles Johnston, President of the | Alaska Miners Association, also had |+ turn on the stand before the Sen= | ite Committee of the Whole, and 1 sther witnesses were still to be call- | =d. when at 5 o'clock, the body arose { ‘o “report progress” with the under- | standing that the hearing would be {continued when the Senate goes | nto session again Friday morning 1t 10 o'clock, | lenator Frank Gordon, author of | Zente Bill No, 12, seemed unable to |realize just how well Prof. Harsch i 1 taking care of his end. The Senator insisted on running inter- i(erencs for the witness, providing ‘leading questions” whenever the | coing appeared to be getting tough. Prof. Harsch came up yesterday | with some answers' differing from| | thosa he gave when he appeared be- | ;[cre the Senate two weeks ago, and {added some additional information. | | That cpponents of the bill were bet~ ter primed for this second appear- |ance of the 'tax consultant scon tbecame apparent. Comes Here On Regquest Senator Allen *Shattuck opened| the quizzing with a question that had brought no response the first ime from Prof, Harsch. ‘When | isked on who's initiative the tax, 'xpert had come to Alaska to pre- pare the proposed bill, whether any member of the Legislature had re- juested his services, Prof. Harschl eplied that he had come at the de- <ire of Gov. Ernest Gruening. Sen- tor N. R. Walker declared that he ad asked the Governor to procure Prof. Harsch’s services. In a preliminary statement, Prof. farsch stated that in the interval| nee the bill was framed some me- Hanijcal faults'and a few other over- ights had been uncovered and that e is mow preparing a group of mendments ‘to the measure which culd Le introduced during second ding. Questioning of the tax authority iered yestérday on a few princi- L issues regarding the tax mea- ire: The taxes on gold mines, the eascnal worker provisions, the cguity of the proposed tax structure, the need for it, the amount of rev- be realized from it and i Jlection: and adminis- 1 “the law, should it pass. More Tax On Gold Mines It ‘was brought out that gold s WOl Hdvé to pay both the present 3 per cent Jevy on gross in- ccmes and the new corporation net income tax of 4 per cent. Similar situations would prevail with regard' to the salmon industry, where case and trap taxes are retained, and liquor, which is also subject to ex- cises. Prof. Harsch explained thai they were the three present princi- pal sources of revenue for the Territory and that it had been thought best not to upset such ma- jor means of financing the Terri- i torial Government,' Gross taxes on ‘Whaley n, which as 10 poesible- might result in a Court holding of unconsnmgémmy; contaibed kug?he treatment “of - seasonal wor! by the bill, Prof. Harsek ered that the differential was dile to the ap- plication of different methods™ for {collection of the tax from. seasonal {workers. He said he knew of no |state.that had an existing,identical statute, but that there is one with |a provision very nearly the same, and that the system of using income brackets as units for taxing is not an innovation. Seasonal Worker Referring to the provisions for col- {lection of the seasonal wotrker tax from employers, Senator Edward D. Coffey put a hypothetical case of an jowner of a salmon cannery leasing its cperation from year to year to dummy corporations. He asked how, in such an instance, where the op- ator, before the due date for the | tax, removed all his assetsfrom the Territory, and where the Outside |owner was not engaged in business in Alaska — how could the tax be recovered. Prof., Harsch said such 2 case would be a test of the effi- Alacka needs such a tax, “Is if for revenues?” the witness declared that a forecast of the revenue to be de- rived under the bill had n pre- pered. In reply to Senatos aley he stated that it was estimated that the net income levy would return $630,000 annually, in additional revenue to the Territory. He quali- fied the estimate by declaring it to be predicated on an assumption of the difference between conditions in Alaska as they are now and as they were in 1941, the date of the last accurate available data. When it was brought out that 1941 was a far better than normal year in the Territory, he was asked for estimates {based on such years as 1940 and 1839, Prof. Harsch declared that he had made no analyses for any years previous to 1941, s When challenged by Senator Shattuck as to the diserepency be- tween the revenue estimate he had just given and his figures given two wecks previously, Prof. Harsch em- phasized that at the former hear- ing he had been careful to set his stimates at a definite minimum and that at that time they had not been preperly adjusted to the 1941 basis. Senator Shattuck came back with the question whether, as a tax au- thority, in light of the very great Increases in the Federal income in would be better for the Territory to run along for the present with its| tax system as it? To this Px‘ol,‘ Harsch said that, if it was thought recent years, did he not believe it| he answer was that gold mining :xhausted the‘resources of the Terri- tory. “Severance” Taxation Mr, Arnold asked: “Then = it's severance’ taxation?” Reply: “Yes."” Clinton W. Stein, of Juneau, asked if Prof. Harsch thought the gross tax on gold and platinum was fair as between the different Divisions of the Territory, considering the differences in mining conditions? Prof. Harsch answered: “That how the law was originally framed was not his business; that the existing law had been adopted into Senate Bill No. 12, without change; that he would not try to pass on the judgement of the Legislaturz that sriginally drew ghe law; that he had =imply adopted it.” Senator Cochran aske “Aren’t you forming an. equitable tax struc- ure?” To that Professor Harsch ‘eplied that fiscal considerations had to be taken into account, also. Mr. Robertson returned to the juesticning. “How docs the srance’ theory of taxation apply to the retaining of the pack tax on salmon?" he asked. “There is'a con- tinucus flow of salmon, which i merely harvested, like any other crop.” Prof. Harsch replied: “There are Tt is necessary to co: tory's major sources of revenu There was no further questioning of Pro. Harsch. He was followed to that a “tax based on ability to pay should be a part of the tax struc ture,” he believed the net income | revenue aspects. Various Angles Further questions by Cenator Coffey drew replies that: There is no credit for earned income provided in the bill; that there is provided a de- ducticn for medical expense, similar | to the Federal; that the seasonal| werker taxing system might be ccn~; sidered an “occupational tax.” | Senators: Whaley and ; Coffey| pointed out the differentials in liv-| ing costs, running as high as' B!,.per, cent, -obtaining «through « the ‘four! Judicial Divisions ‘and three differ-; ent types of economies of Alaska. Is| it. equitable that the tax rate be the same everywhere? they ques- tioned. Prof. Harsch's reply was thnt’ very substantial living cost varia- tions exist in some States having the tax, alsc; that wag2 structure differentials should take care of in- equities. Also, he said, the bill pro- vides personal exemptions double tre Federal to help care for increas- ed lving costs. It was pointed out by the Senators that many workers, such as Gaovernment employees, earn the same throughout the Tarritory Ask€d by Senator Don Carlos Brownell is he thought the Terri- tory's present tax structure up-to- date or adequate, Prof. Harsch' de- clared Alaska's presont sources: of revenue differs widely from these in most States; that licenses are a big part of the system here. Question- ed as to his opinion of the: pFesint tax load on Alaskans, he réplied hat taxes in Alaska, per capita, are very low in comparison with most States. in answer to a query by Senator Gerdon, the Professor stated that if the proposed bill should become law, some present taxpayers might find their taxes reduced. L - Other Taxation Senator O, D. Cochran, who pre- sided at the hearing, asked: “Prof. Harsch, do you know of any part of the United States outside Alaska where the tax burden on the aver- ege individual is so small — is not the tax burden in Alaska the least you know?” To which the reply was: “Thete are certainly very few direct taxes on the individual, for Territorial purposes—the condition is nearly similar only in the State cf Nevada. Direct contributions Alaska residents are now ata mibimum.” o , Quiz By’ First-member of t! toen- ter into the questioning was Attor- ney R. E. Robertson, of Juneau. He asked as to what woeuld be the pol- icy under the bill in fixing limits on salary deductions allowed officers of corporations. Answered that' reascnable salary payments would be deductable as business. expenses, he asked if the Supervisor of Taxation, provided in the bill, would have'the authority to fix what would be con-| sidered reasonable salaries, as in the Federal law? To which Professor Harsch’s reply was that fixing the extent to which salaries might be| taken as tax deductions would be a matter for interpretation by the ad- ministrator of the act. Mr. Robertson then asked: “Would not double taxation result on any parts of salaries not allowed by the Supervisor, inasmuch as the firm would pay one tax and the officer would pay his individual tax on his salary?” answered by Prof. Harsch). Acked by Mr, Robertson if it is not likely that the union action might result in employers haying ac- tually to pay the tax on fncomes of ceasond]l workers, Prof. Harsch put | | | | cizncy of the administrator of the law; that the bill provides a lien the question aside as “pure conjec- ture.” |doublé taxed. (The question was not|rows, adjacent to Ketchikan, com- the stand by Mr. Johnston, who wished to convey the opinions held by his Miners organization on the tax justified, notwithstanding any|Droposed tax measure Double Tax declares he mining indus- objects ' strémiously to being The golad tax| has never béen diked. It is not don sidered equitaile.” & | THe grdss'ta%, hé said, hit hard- est at low-grade and new operations, The proposed bill would be a “double blew” at, the expansion of mining in the’ Territory, because the bulk of procpects for expansion are in the low-grade_ field. High-grade ground is already.keing, or has been, work- | ed: He try Mining At 'Low Ebb The mining indusiry, he contin- ucd, is now “dead.” Rehabilitation of the industry is a mor2 immediate prespect than development. The industry has lost a great deal of eretthd that it will taks several years to regain. Equipment has been .equisitioned by, or sold to the Gov- ernment to aid in the war effort. It must e replaced. | The gross gold tax is definitely a deterrent to the recovery of the in- dusiry, which is to the interest of all the Territs he conc 1 Asked by Senator -Coifey if Le be- ed that the Alaska and other hard-rock mmines, such as that at Chichagof, could have been develop- ed had the gross tax then been in effect, Mr. Johnston replied that their development would have been much more difficult. Senator Cochran asked Mr. John- ston if he had heard that Secretary of the Interior Ickes had wirad a mandate that the grees gold tax ke raised to 8 per cent. | Questicned about the effect of the increase in the price of gold from | $20 to $35 an cunce, the witne: peinted out that not all the bene- fits of the increase were received by | mine owners. The main effect of | crease was to “widen the pay-, ke declared. ESenatcr Coffey querried: “Then increases in the price of gold in-| ses the rescurces of the Terri- | Senator Grenold Collins - asked | about inereased preduction costs, es- | pecially ¢hese due to the war ied. Mr. Johnston answered that inflaticn in tke cost of labor, sup- plies and equipment for mining has amounted to from 35 per cent to 40 per cent since 1939, the last nor- mal year. y { Senator Collins asked:' “Then heavier tax loads' force a narrow- ing of the pay streak?” Answer: “They operate automatically to that end.” The Committee of the .aroge, to report “‘progress.” It was stated that among witness- es waiting to be heard was J. A Williams, General Superintendent of | the Alaska Juneau Gold Mining Company. v — FIRST CITY ASKS NEW BOAT HARBOR The eleventh joint House me- morial, introduced: yesterday in the Territorial House of Representatives by Joe Krause of Ketchikan, urges 4 new boat harbor for that city. The memorial requests Congress to appropriate funds for building a new boat harbor in Tongass Nar- ‘Whole lpler.e with breakwater and a ferr; slip. Manpower Conrol Bilk Approved by .| BLOOMINGTON, | {for the divore arguments ‘pro and con’ as to that.| inue the Terri- | REDTROOPS [ - ENTER NAZI | HINGETOWN (Continued from Page One) { | Marshall Zhukov'’s army is re- | ported attempting a complete encir- Tc}ement of Franxfurt. Pravda said ‘the Russian Army stood only 34 i miles from Berlin in that area. ! B g ameeccomad "Manpower Shorlage - Did Not Affect Her Ind.,—-Monroz2 County Clerk Earl Baxter, annoyad at $330 alimony gathering d in his safe, advertised in a ne to come'in and get it. “I didn't know I had been di- |veresd,” the beneficiary told Bax- ter when sh2 célled for the manty. GECRGE HAYS SOUTH George Hays, wife of the Executive Officer of the Territorial Department of Health, left for Seattle yesterday by plane to enter the Marine Hospital for treatmoent. e FROM SEWARD Frances Ollestal, Seward, is stay- irg at Hotel Junéau. MRS. M THURSDAY, FEBRUARY 22, 1945 to the south. Without the ppines, Japan’s lifeline below Formosa is a dead line. The Navy can take its share of glory in this campaign. It knock- ed out the Nipponese fleet in the iginal landings on Leyte, It prevented the foe from from land- — !ing reinforcements on Luzon. Philippines isn't won yei by any, But credit for the real surprise means. But there is no longer any sirategy must go to MacArthur. Al- question abeut its outcome. rcady they are saying here that it o e is enough to place him =nlcngside The importance of clearing the Ceasar, Napoleon, Lee, Stonewall Japanese out of the Philippines Jackson and several others in the houldn't be unc imated. IS military histogy books. more than a token victory. It's ————— the bridpe to China, an es off the whnols of the Japanese con- Luzon Sirategy Is One For Books; MacArthur Pulls Off Great Move {Continued. ffom Pége One) BUY WAR BONDS HOMPSON BRAND Blended Whiskey 86,8 Proof —65% Grain Neutral Spirits . Glenmore Distilleries Co., Iflmf)u‘w!ed_, I'.o'ul' HALEND FOR BETTER D e e e ONE OF THE FIRST survivors of Bataan to return to American forces on Luzon, Pfc. Jose Pa formerly of Washiigton, D. C.y | was & member of the 31st Ir- fantry regiment on ‘Bataan. i:le' escaped imprisonment when Ba- taan fell and has been with 'the guerrilles since the Philippnwsv fell. (International) SHRINE DANCES (INVITATIONAL) SATURDAY—February 24th and APRIL: Tth BOB TEW'S ORCHESTRA MASONS AND EASTERN STAR MEMBERS | - SAVEITHESE PATES—— ! } { YOU ARE INVITED DANCING '10.P; M./TO 1'A! M. FORMAL: DR. RAE LILLIAK CARLS s OPTOMETRIST IS NOW IN JUNEAU - To Examine EYES and Fit Glasses Phone 636 for Appoiniment OFFICE IN BLOMGREN BUILDING ¥ il i i B Y | i i e b it e i S The Gastineau Cafe Again Presenls TONIGH! 7:38 A Batile TheJ "THE JUNEAU JAMBOREE" TONIGH! 7:36 | over K-I-N-Y of Wils . . . Which Is the Most Intelligent? uneau ROTARY Club? Y S The Juneau LIONS Club? LIONS ERNIE LINCOLN DON FOSTER BARNEY ANDERSON ROTARIANS MIKE HAAS DICK BYRNES LT, WARREN v§ CARO With Local Talent to Entertain You THE CAPITOL CITY TRI Vocali st PHYLLIS MEYERS and MARY KELLY on assets and for “jeopardy” assess-| Questioned by W. C. Arnold of ore the assets, such as packed fish,| ¢ open to a taxpayer who thought culd be removed. a decisfon of the Tax Supervisor not Asked by Senator Shattuck: “Isn’t|°quitable, the Professor said that axation predicated on need?”, Prof.|such g taxpayer could take his case Harsch replied that was & matter of|%0 the District Court, but that the | ‘egisiative policy; that frequently|ourden would be on the taxpayer to ax systems were overhauled and re- |$how the existence of the inequity. | ments which could be collected be-|Ketchikan as to what appeal would | Senafe Commiffee WASHINGTON, Feb. 22—A man- power control bill with heavy jai and fine penalties directed agains offending employers has been re ported favorably by the Senatc T ied to improve the structure, Another galleryite hearkened back He ciaborated to the effect that|'o the proposed supcrimposing of ability to pay” is the basic philos- two taxes on gold mining, asking: phy of the net income, tax, which| Do you ‘consider the levying rplies to all the different types| oth taxes to be fair?” i categories of taxpayers, but| ~To which Prof. Harsch replied: ich may be modified and limitsd,| ‘Personally, I do.” 's it now is in some of the States| Mr. Amold followed up by asking [ raving income tax laws. the Professof on what gencral prin- Asked by Senator Coffey why ciplé he thought it fair, To which . Military Affairs Committee. Unlike the House-approved Work- or-Jail Bill, it does not assess suct penaltics on those who refuse tc tdke essential jobs, Chairmai said. —————— MRS. ROSE HERI Mrs. Joe Rose, of Ketchikan, is & guest at the Juneau Hotel, HE GASTNETTES PRIZE WINNING TEAM TO RECEIVE AWARD COURTESY OF FRED: HENNING . Complete Clothier * y - Emceed by Rotarian Henry Hogue—and Lion Jim Kelly A STUDIO PRESENTATION Produced and Directéd by JIM KELLY for the GASTINEAU CAFE