The Washington herald., 1921-08-02
MELLON URGES
3-CENT STAMP
F0RLETTERS
Would Put $40 Tax On
Autos and 2-Cent Levy
On Checks.
SECRETARY POINTS
TO NATIONS NEEDS
Favors Reduction of Rates
On Large Incomes to
40 Per Cent. -
~ JOHN sLE1ssxER.

A nat tax OF f1e on every automo-
bile. and an increase In letter post
age from two TO three centA are
two Of the new ievies favored by
Secretary Of the Treasury Meiion-
Mellon. with q corps Of assistants.
discussed the tax problem win the.
House Ways and Means COMMITTEES
for more than three hours yesterday
behind closed doors NeIiou's rec
concentrations are expected TO have
great weight with the committee.
which is now engaged IN drafting
1 new revenue laws particularly
since his measures are said 20 have
the support OF President Harding.
Fsvors Tax On CkeekA
Mellon also made these recon
mendations:
Increased taxes on cigarettes snd
tobaccos s-
A tax Of two cents on every check.
Repeal OF the excess profts tax.
Reduction of transportation tax
by one-half. a
Repeal OF minor nuisance taxes
such as those on soft drinks, but re-
tention of the tax on admissions.
Increase in the nat corporation
income tax from 10 TO Is per cent
and possibly more, with repeal OF
the capital stock tax
Readjustment Of income-tax rates
50 the combined normal and surtax
rates would be reduced from 10 per
cent on large incomes to 20 per cent
Thfsks Astos Should P.y.
The tax on automobiles, accord
ing 20 the Treasury recommenda-
tiGns. would apply 20 every car an
the same fashion, REGARDLESS az tts
cost or horsepower. Mellon areued
that Il was justined because tne
Federal government IN spending
500 900. 900 a year on rood roads.
fer which he thouEhf ths automo-
bfles should pay. He Injured that
the .1o.oo0.o0e autos On the country
would produce that amount
Committee members. among them
Representative Kordney, the char
man. objected 70 the proposed
method of levying the tar cheaper
cars OF small power. they held.
should not be obliged to pay an
equal amount % large cars ana
heavy trucks
Expects Postal Deaeit.
II was suggested that the pre-
ceeds from Increased letter postaR.
expected to reach about s7s JOOO. GOO
annually. be turned into the Treas
ury as general revenue. Postal rev.
enues have been shrinking rapIdly
In recent months, and the snrretted
increase has found favor IN iunu.r-
tial quarters. II Is expectsd a de-
hctt for the past fiscal year Of about
t4o.e0o.ooo will be reported from ne
operation Of the postal system.
The repeal OF the excess pronts
tax. for which business has been
clamoring. has been recommended
for months, on the ground that the
tax has lost its productivity and
that IL is complex and djn.cult Of
administration The committee was
offered an estimate that The tsr
In 1921 would produce not more
than $3.50 100000, whereas in 1918
the yield was nve times that amount.
mellon favored imposition Of other
taxes on corporate profits. % brins
In the neighborhood of $500, 600. Gee
annually. =
Transportatiea Tax Neee.-sr,.
Committee members acceded 20 IN.
view Of Mellon that il would be
necessary 20 retain the Transports.
uon tax. at least in part II Is
Dig revenue-producer. yieIding mor~
than ts2S.ooo.ooo annually. MeIieo
told the committee he believed n
would be possible TO abolish the
tax next year. :
The minor nuisance taxeS' tue
eommlttee was told, yield but sSa.-
"Vo;coo, and can well be dispensed
win. These taxes. including thar
on sooa fountain drinks, were said
70 oe vexattous and diricuR % ad-
minister. The tax on admissions.
wn'ch it had also been hoped might
he repealed. was charactert.ed a.
simple end productive, and fits re-
tention was advocated.
Needs s4.ooo.ooo.eco YseId. cd,
Mellon told the committee he rec
emmended the readjustment of sur
tax rates not TO relieve the rich.
but because the high rates now i'm
posed have passed the point Of max
tmum return. More revenue would
De derived from lower rates, he de-
clared. because high rates drive
money into nontaxable securities
and act as a bar to transactions
involving turnoSers Of securities and
property. q
Revenues both this year and n.st.
the Secretary declared. must be kept
at point to yield $4,000 coo, ,oOo ]
year. because Of the heavy erpendi-
lures OF the government and the
large amount Of maturing obliga-
tions This will mean. it was poiuf.
ed out. that no material reductions
In the tax burden can be made. al.
though inequalities and injustices
IN the present system cap be 70.
moved
Pre-is-s Cut Of $500 .ssa.sss
We will be able 70 cut tsxes
ssoo.ooo.ooo. without any doubts
said Chairman Fordney % the COM 4
mittee. after the meeting with See.
rotary Mellon
She Oaer.e~-- 80 49,