The Washington herald., 1921-08-13
FAMILY HEADS
Will GAIN $500
EXEMPTION
Also Allowed $400, Twice
Former Amount, for
Each Dependent.

Taxes were reduced for heads of
families with moderate incomes by
Republican members of the House
Ways and Means Committee IN
whipping the revenue bill into shape
yesterday. The exemption applying
to individual incomes was increased
from $4,000 to S2.500 for those whose
net income Is not more than 5000.
The action was taken on the motion
Of Representative Longworth, Of
Ohio.
No change was made in the pres
ent $1,000 exemption applying to
single persons. The exemption for
each dependent will be $500 as
agreed upon earlier in the week,
this amount being twice the present
5000 exemption.
Represents Loss OF $50,OOO.0OO.
1t was estimated that the $500 in
crease in the. exemption to which
married men with incomes less than
5000 will be entitled will mean a
loss in revenue OF about s3esoo. 900.
The increase insthe exemption for
each dependent will mean a loss of
$20,0o0,0o0, these two cuts repre-
senting a total loss of $4,000. 900.
The committee decided to stand
pat on the present surtax rates on
individual incomes below the pro-
posed new maximum of 80 per cent
applying to incomes above S66,0o0,-
600. The proposal OF Secretary OF
the Treasury Mellon that this maxi
mum be reduced to rs per cent for
income of the calendar year 1929,
M
jected.
pected to mean that there will be no
further agitation for any decrease
in the present normal taxes OF 4
per cent on net incomes of less than
$4,000 and per cent on incomes in
excess of that amount.
Cuts Fur and Candy Taxes.
The committee reduced the tax on
furs from 10 to per cent and also
cCt the manufacturers tax on candy
from to per cent. The tax on
works of art was reduced from 10
to per cent.
1t was decided to make no increase
in present taxes on tobacco and
7 cigarettes. The committee voted
to repeal all of section 904 of the
pASoChl Ia p" IuC SO-Called
| luxury taxes. This was in accord
ance with the recommendation of
Secretary Mellon. Earlier in the
week the portions of this section
applying tc clothing were voted
cJt but at that time taxes on car
pets and rugs, picture frames,
trunks, valises, purses, portable
lighting fixtures. umbrellas and
fans were retained. Taxes levied
under this section have been COM
puted in amounts in excess of Ger
| tain prices.
May Tax Manufacturer.
As a substitute for the taxes in
section 904 II may be decided to
impose somewhat similar taxes ap-
plying to the manufacture instead
Of the retailer. whether such a
plan as suggested can be admins
tered successfully Is under discus
sion. 1t is proposed that the manu-
facturer pay a tax of Q per cent on
the articles enumerated in section
304, the tax to apply only when the
articles were designed for sale at
retail for amounts above the prices
as stated in toe present section.
The tax would apply on the entire
amount of the manufacturers sale
price, although the probable retail
price also would enter into the Sit
uation. The present retail tax is 10
per cent.
The committee decided not to re-
peal the capital stock tax applying
to corporations, the members not
seeing their way clear to make a
further increase in the proposed Is
per cent tax on corporation incomes
to make up for the loss in revenue.
The fu1l Ways and Means Com
mittee, including the Democrats,
will be called together on Tuesday.
The committee will report the bill
20 the House at that time and IL
will be called up FOR action on the,
floor Wednesday.