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Helnl Radio News Service
11/17/48
SEN, BRIDGES QUESTIONS RADIO, MOVIE, SALES SERVICE
The question of whether some top-flight radio and screen performers are paying their full share of income taxes was raised by Senator Styles Bridges, Republican, of New Hampshire,
Writing to George J, Schoeneman, Commissioner of Internal Revenue, Mr, Bridges said, according to the New York Times, he had been advised that some stars had contracted tlieir services on a "sale of a business" basis and that the sale had been negotiated under the capital gains provisions of the tax laws,
"It is ray understanding", the Senator said, "that the result is an avoidance of normal income tax payments on personal income der¬ ived from personal services rendered,"
(The capital gains rate is a flat 25 per cent, while income tax rates graduate to about 75 per cent, )
Without naming any persons, Mr, Bridges stated that he under¬ stood further that other "sales of services" were being planned, then added:
"I am told that officials of the Bureau of Internal Revenue have made an official ruling regarding the legality of these trans¬ actions, and I should like to be informed regarding that ruling and the basis for it,
"It is apparent that this 'sale of a business* procedure by high salaried persons whose income is derived from v/hat is ordinarily considered to be personal services is resulting in a loss of revenue to the Government, and if continued the total loss would be sizable,
"Therefore, I should appreciate it very much if you would make available to me at your earliest convenience a copy of the Bureau of Internal Revenue ruling which I am told has been made and inform me regarding the basis for that ruling,"
Bridges said that he would present any information he received to Senator Eugene D, Millikin of Colorado, Chairman of the Finance Committee, which handles revisions of tax laws.
At the Bureau of Internal Revenue, it was said that no official general ruling had been made, but that there had been‘’correspondence" in connection with such sales of service,
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The New York Police Department will acquire 350 new radio cars in the near future, some 175 of which will be used to replace old equipment. He said tiiat 100 new motorcycles and thirty-three new sidecar motorcycles also would be added soon, all radio equipped,
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