New-York tribune., 1921-09-10
Attack ON Tax
Bill Launched
By Democrats
Hitchcock and Simmons AS
sail Retroactive Repeal of
Excess Profits Levy and
Cst of Higher Ssirtaxes
Urge Documentary Stamp
Before Committee, Secretary
MeIloes Fixes Total Rev
enue. at $3, ,298, ass, 900

pemoTatic opposition in the Senate to
the Administrator revenue bill came
into the open to-day for the first time.
With the appearance of Secretary of
the Treasury Mellon before the Sem
ate Finance Committee again this
morning, the minority in the upper
House, through Senators Hitchcock
and Simmons, let go the first guns of
It's attack.
The fight of Democrats against the
hill in the Senate will have the same
basis as that waged by the minority in
the House The proposed retroactive
repeal OF the excess profits tax and
Secretary Mellon's proposal to reduce
the higher income surtaxes to maxi
mum level Of 20 per cent will be the
two principal targets. The Treasury's
suggestion that the transportation
and insurance taxes be merely re-
duced By one-half for the present, in
stead of completely abolished as pro-
vided in the House bill, also will come
within the fire of Democratic Sena-
tons.
They will demand, it was shown to-
dav, repeal of the excess profits tax
uuon January /, 1922, and the substi-
tuition thereafter Of documentary
stamp tax, which they claim will fully
meet the losses in revenue accruing
from this elimination.
Democrats Question Mellon
Secretary Mellon was before the
finance Committee fer four hours. The
time was devoted largely to reviewing
various angles of his taxation plan.
The Secretary was closely questioned
by Democratic Senators, who laid par
t:cular stress upon the possible total
Weld in revenue under the changes
recommended.
The Treasury Secretary estimated
that the revenue bill, with his pro-
posed alterations, would bring in ap
uroximately S3,29S, ASS, 900 during the
fiscal year 1922. AS passed by the
House the measure would have an
estimated yield of S3,314, ,455, 900. In
this connection, Treasury Actuary NC
Coy presented figures showing that
Secretary Melons revisions would
raise s4l4,500 600, while the total loss
through the retroactive repeal of
the excess profits tax would be
SS1o,000,000.
With the program of government
economies in every department being
effected by Director of the Budget
Dawes, Secretary Mellon told the COM
mittee the slight loss in revenues in
his plan, as compared with the House
bill, could be handled comfortably.
Extension OF the authority of the
Secretary of the Treasury in the mat
ter of issuing notes, as provided IN
~3 L, CT 0il0
100000 to 81 800, 900 900, also was dis
russed with the committee by Mr.. Mel
lon. This additional authority for the
issuance of $500 COO, GOO more in notes,
he declared, must be had in order to
Offset the possibility of there being a
shortage of balance during the next
Few years while the Treasury is con-
vsrting its short-dated debt into longer
term bonds.
Simmons Opposes Transportation Tax
At one point in the discussion Sem
stor Simmons, former chairman of the
committee and now ranking Dem ocratic
member, took sharp issue with the Sec
retary. The Senator challenged Mr..
Melons statement that the yield from
his revenue plan would be sufficient for
the governments needs, and voiced
strong objection to the transportation
lax as revenue producer. Any bene-
its to business from the repeal OF ex-
cess profits taxation would be largely
offset, he contended, by the imposi-
ton of any form of transportation tax.
Senator Simmons said documentary
stamp tax would produce as much reve-
nue. as the proposed one-half rate
transportation tax, and would not place
an additional burden on tax-handi-
capped business.
Simuons's attack was reinforced by
STATEMENT by Senator Hitchcock, who
objects particularly to the proposal to
reduce the higher income surtaxes to
"a per cent.
Assails Retroactive Feature
1.-THE proposal to do away with the
excess profits tax and with all surtaxes
over 25 per cent on individual incomes
is. in my opinion, very Objectionable" ;"
Mr. Hitchcock said. ITO make the pro-
posed repeal of the excess profits tax
retroactive to last January adds to the
mistake. The surtax is the extra tax
rand by individuals with large incomes.
Ihe larger the income the higher the
rate of tax until under the present law
the rate reaches Ga per cent.
Secretary Mellon proposes to stop
increasing the rate as soon as it
reaches 25 per cent. That is to say,
man having more than $4,000 income
year would pay 25 per cent on every
tnlng above that amount, regardless of
whether the excess was $1,000 or ST.,
ou00Oo. | think the graduation should
continue upward as it does now at least
until the rate Of tax reaches Ga per
cent. Such vast incomes as 100000 or
ever cannot be used as incomes. They
ere merely capital increases. As such
lhey add enormously each year to the
wealth of few. They are contrary to
1he public interests and ought to be
considered contrary to public policy.
lhey can be limited and restricted by
taxation.
In my opinion, one great benefit
which has come from high taxes on in
zones has been to arouse a great in
.erest in government economy by max
ing the people feel the cost of govern
ment The tax on consumption is not
asit by the well-to-do, and as long as
lae revenues Of our government were
raised in that way tho well-to-do
classes were Indifferent to the needs
y economy. When men began paying
uennlte taxes on their incomes they
started the demand for economy in
soserument expenditures.
Republicans Discuss Situation
The country produces a certain
amount Of wealth each year. The share
~ u which each person receives Is his
income. II the very fortunate get in
zones much larger than they can legit-
'.ately spend they deprive others az