Evening star., 1921-08-04
$29Q,0)0,0D0 CUT
NECESSARY IF us.
| AvO|DSNEW TAXES
Secretary Mellon Warns
House Committee Expenses
Must Be SIashed.
COST OF GOVERNMENT
FOR YEAR, s4,55o,0 600, 900
Even With Suggested Reductions,
Says Internal Revenue Should
Yield $3.570,OO0,O0O.

A cut Of more than s250,00O, 900 in
the ordinary expenditures of the
government this fiscal year is neces-
sary II additional taxes are to be
avoided. the House ways and means
committee was informed today by
secretary Mellon. On present esti-
mates. he said. the total government
cost this year will be s4,550,00O. 600.
of which $3.50 000. 900 must come
from taxation.
Even with the suggested reduc-
tions. Mr.. Mellon said, the internal
revenue yield for the year could not
sately be permitted to fall below
*3'9No'oo9ooo. the estimated yield
under existing law
New Effort Indicated.
The Treasury Secretary told the
for the first full month of this fiscaI
year indicated that unless there was
an extraordinary new effort to re-
duee expenditures" the estimate which
the Treasury had presented might be
regarded as conservative. Ordinary
expenditures for July. he said.
amounted to about 1922, ,000, 900, as
against 1907 100000 for July, 1924.
while the current deficit last month
Tas $113.00o.000. as against SIG. S.000, ,0oO
in the same month a year ago.
An ANALYSIS Of the principal items
or expenditure for July. 1921" the
Secretary continued shows that s5s.-
o0O,0oO was on account of the War
Department. s56,000. 600 on account of
the Navy Department and $32, 600, 600
on account of the Shipping Board. II
expenditures are to continue at any
thing like these rates. the estimates
will be greatly exceeded"
Sees Increase I'm Revision,
! Excluding the suggested increase of
cent. in first-class mail rates and
the two-cent tax on bank checks, Mr.
Mellon estimated that the proposed
revision of the tax law would bring
a total yield this year of So. .S.O. .O0O. 600
! and S3.2S3.000.000 in the fiscal year
! 1928. His estimates are assumed on
| the following changes:
increase in the corporation income
tax TO is per cent, as of January 1.
| 1921 (or January 1, 1927. and the re-
peal of the dollar ex-
Repeat OF yss7 excess profits tax. as
OF January l., 1921 Cor January i.
Increased collections of back income
| and profit taxes.
| An increase on the tax on cigarettes
and smoking and chewing tobacco
Repeal Of the transportation tax
| upon freight and passengers: the tax
l.,
1928
An increase of the documentary
| stamp taxes. by approximately dvub-
| ling the present rates SO as to yield
| an additional SS0.000.000.
The license tax upon motor vehicles,
averaging about $40 apiece, and to be
graded according to power.
Repeal of the tax on ice Icream and
fountain drinks as of January l. 1922.
pnN ytofo -
| with a maximum surtax rate reduced
! to 80 per cent.
| Repeal of the so-called luxury
taxes on wearing apparel. carpets
| rugs. trunks. valises and the like.
Two Sessions Yesterday.
Republican members of the committee
held two extended sessions yesterday
discussing with DR.. T. S. Adams a Treas
ury tax expert. the grouping of various
administrative features of the bill and
other changes which would make for
simplication in determining taxes Chair
man Fordney said some very helpful
srgge stions had been received.
II the suggestion made by Treasury
experts are followed the old bill will be
! largely rewritten. This proba bly,. would
delay its presentation to the House con-
siderably beyond the time heretofore
expected.
Chairman Fordney and other mem
bers emphasized the magnitude of
the TASK before the committee, and
| they say it is proposed to go very
| carefully into all phases of the sub
; ject. since the bill is expected to
stand for a number of years Rail-
| road financing is only one of a list
of subjects coming in for careful
| study, and after. the majority MEM
| bers have agreed upon an approyi-
! mate total of the revenues needed
| next year they still will have before
them the task of reaching an agree
ment as to what tax changes are to
be made.
Members Now Apart.
Apparently the members now are
| somewhat far apart as to the actual
| amount o. taxes that it will be nee
| essary to raise. 1t has been esti-
| mated that the present law will
yield approximately $500. 600. 900
! this fiscal year. but revisions sug-
| gested would reduce this tokal. All
members of the committee are not
yet satisfied that this can be done
with safety.
! Since the Treasury suggestions for
new taxes were presented on Mon
| day there has been evidence of an
| increasing opposition to a repeal Of
the excess profits tax. but apparently
those championing this change in
| the law do not believe that this op-
position has reached such proper
| tions as to threaten defeat Of the
plan.
|