The New York herald., 1921-09-09
Fight over TAX BILL
Will Hold UP ANEW
TARIFF Until SPRING
Mellon Urges His Amend.
ments to Tax Measure Be-
fore Senate Finance
Committee.
TOTAL rs SB,2OO,OOO, 900
Repeal of Excess Profits
Dated Jan. 1, 1921, and
Capital Stock Next Year,
by Secretary.
BIG CONTEST IS EXPECTED
Calder Explains to Harding
His Plan to Tax Beer and
Spirits, Adding to U. s.
Revenue.
BIG CONTEST is EXPECTED

special Despatch to TIE New York HERALD
New York Herald Bureau,
Washington, ID. C., Sept 8.
When Secretary Mellon appeared be-
fore the Senate Finance Committee to-
day urging, a series OF sharp amend
mcnts to the tax revision bill as passed
by the House it became known tha,
there is virtually no chance Of the en-
actment Of new tarff bill before mex,
spring. The possibility Of additional
revenue from tariff schedules was ex-
cluded from consideration by commit
tee members and the Secretary.
All energy Is to be devoted to the
tax bill, with the prospect that it can
not be passed much before the end OF
the present session Of Congress, Oh
around December 1. The first part OF
the regular session Is to be given over
to consideration Of other urgent legis-
lation, while the emergency tariff law
which will expire on November 27, is
to be extended by resolution until the
permanent tariff law is enacted.
The possibility of harmonious and
therefore speedy passage OF the tax
revision law vanished when Secretary
Mellon offered his amendments to the
House tax bill.
Mr. Melons Recommendation.
Mr.. Melons recommendations in
cluded: t"s
1 Repeal OF the excess profits tax.
effective as of last January /, in
stead of next January /.
y Retention or all. this 7sxanaDg5ta-
ton taxes for the calendar year
1929, but at half the present rates,
instead of complete repeal as Of next
January 1.
4 Repeal OF the capital stock tax.
effective next year. an entirely
new proposal.
A Reduction of the maximum in
come surtax rate from SO per
cent. to 25 per cent. effective Janu-
airy /, 1922, instead of to 80 per cent,
as provided in the House bill.
& An increase of 8 per cent. In
stead OF 21s per cent. in the nor
NAL corporation Income tax, making
the total Is per cent, retroactive to
last January I.
z manufacturers tax on cosmet-
" les and proprietary medicines to
replace the present stamp taxes.
which were eliminated by the House.
= Retention next year OF the taxes
on insurance premiums. but at
one-half the present rates.
Fight over Repeal of Taxes.
Secretary Melons advocacy of a re-
troactive repeal of the excess profits
tax Is In direct opposition to the House
view. which is that the excess profits tax
be repealed as OF January I, 1922. That
bitter fight will develop over the ques.
ton is evident from the fact that senti-
ment in the House seems overwhelm-
ingly in favor Of the repeal as of jan
uary l next instead OF the first OF the
present year. The House Republicans
are divided on the matter while the
House Democrats do not want the repeal
to be retroactive.
Secretary Mellon would supplant the
excess profits and capital stock taxes
by increasing the total income tax on
corporations TO Is per cent instead
OF 10.
Mr.. Mellon went into detail as to
the state OF the Treasury, standing
firmly behind the estimates OF expendi-
lures for the fiscal year OF 1922 which
will have to be met, for the most part.
from the tax law. He said the ex-
penditures for the fiscal year would not
be less than s4,034. 900. 900.
II had been estimated originally that
A,554. 900. 900 would be required to run
the Government during the fiscal year
1922, but at a conference at the White
House on August ., attended by Prcs-
dent Harding. Secretary Mellon and
Budget Commissioner Dawes, II was de-
cided that s52o.o00.000 probably could
be saved. Mr.. Mellon ia of the opinion
that the savings proposed can be ac-
complished by cuts that have been out
lined and by the reorganization of the
departments soon to be attempted.
Sees $4,000. .O0O,O 900 in nil.
II Is 'ie belief OF Mr.. Mellon that tho
expenditures of the year will be me,
by a tax bill yielding $4,000 000. 900, OF
thercabouts. The balance slightly ir
excess of $s0o.000 900, he estimated
would be forthcoming from customs
revenues and from the collection Of bach
taxes. for which the Administration nov
y making drive. Treasury actuarles
Mr.. Mellon explained. figured tha. tn,
$4,000. 10000 necessary for the YEA,
would be raised by the House bill Il
amended as he suggested.
In view Of the changes In the bill M
recommended by Mr. Mellon and tho
probability that they viii be edoptc I'd
for the most part by the Senate Finance
Committee when It comes time 10 re.
write the House measure. 1t Is doubtful
n report will be forthcoming from tho
committee for several weeks. While
many elements enter into the situation
TO make any prediction rnsafisfactory.
II - the view OF Senate lcadnrs t!iot All
they can hope for IL the passage tf the
tax bill by the end Of the extraordinary
session. There Is bound to be aehi