Arizona republican., 1921-09-09
MELLON SUGGESTS CHANGES IN HOUSE
 TAX REVISION BILL

WASHINGTON, Sept. 9-ChangeS in the house tax bill. recommended to- day to the senate finance committee by Secretary Mellon included:
 Repeal of the excess profits tax. effective as of last January instead of next Jan. l.
 Retention of all transportation taxes for 1922, but at half the pres ent rates instead of complete repeal as of next Jan. l.
 Repeal of the capital stock tax ef- fective>next year, a new proposal.
 Reduction of the maximum income per cent. effective next Jan. l, in- stead of to 32 per cent as provided in the house bill.
 An increase of per cent, instead of 21a per cent in the normal cor poration income tax, making the to- tai Is per cent, retroactive to last Jan. 1.
 A manufacturers tax on cosmetics and proprietary medicines to replace stamp taxes which were eliminated by the house.
 Retention next year of the taxes on insurance premiums, but at one- half present rates.
 With these exceptions, the secre- tary was understood to have ap- proved the house measure with its provisions for an increase of $500 in the exemption to heads of families having net incomes of s5,000 a year or less and s20O additional for de- pendents; for decreased rates on sporting goods, yachts and furs and for manufacturers taxes on fountain syrups and other ingredients of soft dv-fr in 0f ance taxes.
 The secretary placed the probable revenue needs of the government fol this fiscal year at s4,034 900. 900 on the | basis of the reduction in expenditures | agreed on at the White House tax l conference last August and estimat. ed $500, 1000, ,00O of this total would bs | raised from non-tax sources, leaving l S3, 234, 900, 900 to come from interna 1 taxes.
 This total is s134, ,OOO. 900 less thar the estimated receipts under ths | house bill for this year, the differ ence being accounted for through re. peal of the excess profits tax as O. last Jan l. It was to make up tn, loss from the profits tax that MT Mellon proposed an additional 2i5 pel cent increase in the corporation in come tax, retention of the transporta. ton and insurance premium taxes anC restoration of the taxes on cosmetics | and proprietary medicines
 The additional corporation incom, l tax is estimated by treasury officials to yield approximately $260,0 900 1 year. The transportation tax woul, 1 return S120,000,000 next year at hal | the present rates and the insurance l taxes and levies on cosmetics an, medicines s25, 900, ,000.
 Explaining his proposal for a fur | ther reduction of [ per cent in tn 1 maximum income surtax rates. Mr
 Mellon was said to have declared tha the lower rate eventually would re
 turn a greater yield to the govern
 ment than the 32 per cent, becaus
 additional money would be devote,
 to active business instead of beini
 invested in tax exemption securities.
 It was stated that there was n
 discussion of new sources of taxatioi and that nothing recommended by Nh
 Mellon who estimated that the hous
 bill as amended in accord with hi recommendations would meet in needs of the government, provided tn
 economies agreed on at the Whit | House conference were effected As the authorization in the hous | bill for the treasury to issue $500. 900 900 additional in short term notes. r was said officially. that this had n : relation to any anticipated defict
 and was not wholly necessary as tn ) treasury had asked for it merely wit the idea of having a little more mar l gin in funding victory notes and cer tificates of indebtedness in short terr securities.