80TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

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REPORT No. 1586

APPROPRIATIONS FOR FOREIGN AID, WELFARE OF INDIANS, AND TAX RETURNS

MARCH 22, 1948.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. WIGGLESWORTH, from the Committee on Appropriations, submitted the following

REPORT

[To accompany H. J. Res. 355)

The Committee on Appropriations, to which was referred the House Joint Resolution 355, making appropriations to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1948, and for other purposes, reports the same to the House with the recommendation that the joint resolution be passed.

The estimates upon which the resolution is based are contained in House Documents 502, 565, and 572.

FOREIGN AID

This item, $55,000,000, for aid to Austria, France, and Italy, is authorized by Public Law 389 of the Eightieth Congress. For these purposes, a total of $597,000,000 was authorized and of that amount $522,000,000 was appropriated in the third supplemental appropriation bill signed by the President on December 23, 1947. The State Department advises that it is necessary to appropriate the additional amount of $55,000,000 in order to meet urgent needs between the date when the appropriation of $522,000,000 will have been exhausted, about March 25, and the date when funds will become available under the European recovery program bill. The committee is also informed by the State Department that the amount of $55,000,000, appropriated in the accompanying resolution, will be offset by reduction in funds to be made available under the European recovery program bill.

H. Repts., 80-2, vol. 2- 66

WELFARE OF INDIANS

The extraordinarily severe weather during this winter has made unanticipated inroads on funds available for relief of needy Indians. There are now a number of extremely acute situations for which funds are urgently required. The committee has received a budget estimate of $125,000 for this purpose and is convinced that if real suffering, and possibly outright starvation, is to be avoided, the sum must be appropriated immediately.

REFUNDS OF INTERNAL REVENUE COLLECTIONS

For the fiscal year 1948 an appropriation of $1,231,000,000 was made for refunds of overpayment of taxes. Expenditures to December 31 total $404,000,000 and as of March 11, $697,000,000 had been disbursed or scheduled to the disbursing offices for payment since December 31, making a total for the year as of that date of $1,101,000,000. Claims in the amount of $107,000,000 were scheduled to the 26 disbursing offices in the field during the week ending March 11. If that rate continued, $21,000,000 per day, enough claims would have been scheduled to the disbursing offices by the close of business on March 19 to exhaust the entire appropriation. Departmental officials state that the rate is increasing, inasmuch as during the week ending March 4 claims to the amount of $91,000,000 were processed. There is a several days' lag between the scheduling and the actual issuance of checks by disbursing officers and it appears that the entire fund will have been expended before the end of March.

The committee has under consideration a deficiency estimate of $800,000,000. The rate of expenditure has increased rapidly during recent weeks and is in excess of the rate for comparable periods in previous years so that it is not now possible for the committee to determine just what amount may be required. Therefore the committee recommends an appropriation of $500,000,000 to meet immediate needs. The whole problem will be studied in connection with the general deficiency bill to be reported to the House within a short time. Now that all tax returns for 1947 have been filed, current data can be developed very soon and the committee should be in a position to estimate accurately requirements for the remainder of the year.

MARCH 22, 1948.-Referred to the House Calendar and ordered to be printed

Mr. ALLEN of Illinois, from the Committee on Rules, submitted the

following

REPORT

[To accompany H. Res. 505]

The Committee on Rules, having had under consideration House Resolution 505, report the same to the House with the recommendation that the resolution do pass.

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80TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session

REPORT No. 1588

ASSISTING STATES IN COLLECTING SALES AND USE TAXES ON CIGARETTES

MARCH 22, 1948.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. JENKINS of Ohio, from the Committee on Ways and Means, submitted the following

REPORT

[To accompany H. R. 5645]

The Committee on Ways and Means, to whom was referred the bill (H. R. 5645) to assist States in collecting sales and use taxes on cigarettes, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass. The amendments are as follows:

On page 1, line 7, insert after "gift" the following: "of more than 200 cigarettes".

On page 3, line 2, strike out "twelve" and insert in lieu thereof "six".

NEED FOR THE LEGISLATION

Avoidance of State sales and use taxes on cigarettes, through their shipment directly to consumers in the taxing State from sources outside its borders, has reached alarming proportions. Such shipments are very largely by parcel post, for the light weight and small bulk of the article, in comparison with its value, make this method of transportation particularly suitable. Moreover, shippers and consumers alike prefer the use of the Federal agency of the Post Office in these transactions. Your committee believes that this type of tax avoidance is seriously objectionable on three principal grounds: Its encourages disrespect for law, impairs State revenues, and creates competitive conditions unfair to dealers in taxing States.

Estimates of revenue loss show considerable variation as between States, due mainly to differences in rates of tax and market capacities and to the proximity of a State which imposes no tax or which taxes at a substantially lower rate. State cigarette taxes range from 1 cent to 6 cents per package of 20. Testimony given your committee in public hearings indicates that the percentage of revenue loss to poten