SECTION B
Medford
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Tribune
MEDFORD, OREGON, THURSDAY, JUNE 13. I63
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Forest Products Industry Appears Tax Case Winner
NEW POPE DISCUSSED Joseph Cardinal Ritter, left,
archbishop of St. Louis, and Laurian Cardinal Rugambwa,
archbishop of Rutabo, Tanganyika, who were appointed
"Princes of the Church" by the late Pope John XXIII, get
together during a meeting at Vativan City to pave the way
for election of Pope John's successor. Cardinal Rugambwa
was the first Negro to be elevated to the princely rank in
the modern history of the church. (UPI)
By A. ROBERT SMITH
Mail Tribune
Washington Correspondent
Washington - The forest
products industry has appar
ently won its campaign
pm.iitw against a tax
i n c rease un
der the Ken
nedy adminis
tration's tax
revision pro
p o s als. The
House Ways
and Means
Committee, in
the process of
.Bkl.ith araiiing
new tax bill, has killed the
administration's idea for a
sharp cutback in the capital
gains allowance on timber
sales - one of the most bene
ficial features of the federal
tax laws for many companies
in the forestry products field
since World War II.
Under a tax law adopted
in 1944, companies selling
timber paid taxes on its in.
creased valuation at the capi
tal gains rate of 25 per cent.
This year the Treasury De
partment proposed eliminat
ing this low rate and taxing
such profits as ordinary in
come, either at the much high
er personal income rate or
the prevailing corporate tax
rate which is currently 52
per cent.
The Treasury figured this
change would cost industry
and benefit the government
by $90 million, $75 million
from corporations in the lum
ber, paper and plywood busi
nesses and $15 million from
individual timber owners.
Treasury officials claimed
present law helped the large
corporations chiefly, such as
Weyerhaeuser which paid at
a rate of 27 per cent in 1961,
Georgia-Pacific which paid 28
per cent and U.S. Plywood
paid 30 per cent.
Chang Dttrimtnla!
During hearings on the tax
bill before the Ways and
Means Committee, industry
witnesses stressed that good
conservation practices, such
as the growth of private tree
farms, were possible only un
der capital gains treatment.
They said a change would be
detrimental to this long-range
effort at providing new tim
ber supplies and that many
corporations would simply
cut and get out.
The Forest Service backed
up the general contentions of
the forest products industry
in a report subsequently made
to the Treasury Department
but never made public, ac
cording to Rep. Al Ullman
(D-Ore.), the Northwest rep
resentative on the Ways and
Means Committee.
"Treasury admitted Its po
sition was not sound," Ull
man said, "after the Forest
Service said its proposal
would seriously affect refor
estation." As tentatively approved by
the committee, explained Con
gressman Ullman, timber
owned by an individual would
continue to get the same capi
tal gains treatment as the
present law provides, unless
he has owned it for over
three year.
This means that timber
owned by an individual and
sold under contract or used
in a business after being held
from six months to three
years would be computed as
follows: half the gain in that
capital asset would be added
to the individual's taxable
personal income but it could
not be taxed at a higher rate
than the 25 per cent capital
gains level.
If the person holds the tim
ber over three years, only 30
per cent of the gain need be
added to the person's taxable
personal income and it could
be taxed at no more than
I9"-i per cent.
Ullman said the theory of
this change is that the com
mittee expects it to stimulate
the economy by giving tax
incentives for property own
ers to sell capital assets that
are not currently being util
ized. While these decisions by
the committee only affect In
dividual holdings, Ullman
said it is virtually certain that
the vrate for corporations
won't be changed. This means
iluit while the tax bill won't
increase tax rates, neither
will it reduce the capital
gains maximum level from
25 to 22 per cent, as Kennedy
requested.
I don't believe the commit
tee will make that change,"
Ullman said. "It would be
too much of a bonanza for
big corporations.''
Treasury officials had said
big corporations gained chief
ly from the present law. They
reported that of 7.000 firms
which shared in $77.7 million
in capital gains in 1961, 20
big corporations divided $47
million of it.
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Tourists Report Russians Slowly Approve Tipping
By JAY AXELBANK
United Prats International
Moscow-fUPD - The Moscow
taxi driver made a sour face
when handed a 20 kopeck (18
cent) tip by the American
tourist.
M i s u n d e rstanding. the
American doubled the tip and
preferred it again.
Again the driver returned
the money. I work for a liv
ing," he said. "Don't insult
me."
The taxi driver was a
"good communist," and good
communists don't accept tips.
Since 1917 the government
has tried to discourage tip
ping as a bourgeois hangover.
From time to time articles
appear in the Soviet press
reminding citizens ' that tip
ping is decandent. Recently
the magazine "UgonyoK
(Little Flame) issued a stern
reminder ' to Russians that
they "humiliate" taxi drivers
by tipping them.
But thousands of Russians
are being humiliated every
day and seem to like tt,
Largely because of the influ-
ence of an increased foreign
tourist flow, tipping is not
only not dying out, it is be'
coming an unofficially ac
cepted custom.
Russians themselves, if ask
ed a direct question, will us
ually react by saying tipping
is "immoral" or "degrading."
But under probing about nine
out of 10 will admit they do
tip.
"I am always in a quan
dary about it," one office
worker told United Press In
ternational. "If I tip I insult
a waiter. If I don't tip I
might also insult him, or be
thought cheap. Most of the
time I tip moderately may
be because I am a little
bourgeois minded."
This correspondent has
found that on an average one
out of 10 taxi drivers in Mos
cow will balk at a tip. The
other nine gratefully accept.
I n restaurants, barber
shoos, coat check desks, etc
tipping is about as usual as in
the West.
Cod Changing
In the years after the 1917
revolution it was fairly com
monplace to see signs exhort
ing Russians not to tip. "Don't
humiliate your fellow men,
was a typical admonition.
But such ethical directives
are rare now in Moscow, al
though the farther one goes
outside the capital, the less
tipping is practiced and the
more likely a tourist is likely
to have his tip handed back.
Moscow coat check coun
ters in winter-Russian custom
demands that all coats be
checked in restaurants, thea-.
ters or other public places-
now sport little dishes with 10
kopeck pieces and other tips.
Many Russians say they tip
approximately 10 per cent al
though some "sports" may, on
a big night at a restaurant
when food and drink flow
freely, tip as much as two
rubles ($2.20) for a five ruble
dinner.
While Western wages for
waiters, hat check girls and
others who supplement their
income with tips often are act
lusted to the handouts expect
ed, there is no such system in
the Soviet Union.
"The time has come," said
a recent letter writer in the
newspaper Soviet Culture,
"when waitresses In restau
rants should say to anyone
giving a tip, 'citizen take the
change, your tip lowers my
dienitv .
Not many Russians in-serv
ice occupations seem to agree
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