Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1921-12-08
MELLON IN HIS
ANNUAL REPORT
URGES ECONOMY
Warns Against New Under
takings That Would Bur-
den the Treasury and
EmbarraSS Operations.
(Ry The Associated Prcss.l

(Iiy The Associated Press)
Washington, Dec. 7,-Furthef
revision of the tax laws, with "A
reduction of the maximum in
crease in surtax rates to 20 or 20
pcr cent and adjustment OF the
rates on business profits and
estates, is suggested by Secretary
Mellon in his first annual report
transmitted today to congress.
The treasury secretary also an
nounces that the treasurys policy
with respect to deferment OF the
soldiers bonus is unchanged, an /
urges prompt funding of the ten
billion dollars OF foreign loans as
zone of the outstanding needs OF
the present economic situation
Mr.. Mellon informs congress
that the maturity within the next
six months of 100000 of the
short dated debt makes it impera-
tive that the government pursue a
policy of the utmost economy and
avoid new undertakings that would
burden the treasury and embarrass
the funding operation with re-
spect to the floating debt.
Revenue Revision.
Revenue revision is the subject
upon which the secretary lays the
most stress. He says the changes
in the tax law voted by congress
last month give substantial relief
TO business and industry, and re-
store in some measure the freedom
of business transactions. but our
system of taxation still requires
careful and thoughtful considera-
ton. lie then proceeds to say that
If the loss of revenue resulting
from the reduction in surtaX and
other rates suggested cannot be
made up "by rigid economy in eX-
pcnditures," it can be met "either
by placing a tax on certain specific
articles, or by n low rate general !
tax on a broad class of articles |.
or transactions"
at is of vital Importance Mr.. |
Mellon declares, that adjustment |
be made in our scheme of taxation !
whereby the burden will not fall
unduly, either directly or Indirect
~, upon any particular class and
at the same time will not seriously
interfere with productive industry
and the general prosperity.
Excessive Rates.
at would not seem either wise
or necessary to change from our
present system OF taxation to new
and untried plans. BY retaining
the increasement tax with reason
able surtaX rates, which in peace
times ultimately should not rise
above 10 per cent, taxpayers
would still be required to con-
tribute in proportion to their abil-
ity to pay; while by placing a
certain amount Of tax on specific
or classes of articles, or {
transactions, also low rate, that !
could readily be borne without {
injury, the increasement tax could s
be materially simplified, the tax
laws could be more readily admin
istered and at the same time thu L
needed revenues would be raised !,
the evil effects now re-
sulting from the present excessive
rates of taxation"
Mr.. Mellon informs congress that
the amount of revenue involved In 1
the suggested reduction of rates, t
lis not nearly as great as is gen. {
orally supposed" I
To reduce the surtax rates to n 6
maximum of % per cent and grad e
uating the reductions through all !
the brackets" he says, would I
mean an apparent loss of about !
1880, 900, 900 in revenue. /
A 20 per cent maximum rate on j
The same basis would involve S
revenue loss of about 5000 900 900. f
M hnp. a Il itte tv,,a &c l,f nh ,IA,,II /
be made would probably involve !
IN amount equal to that made In
he surtaX rates. This loss of rev. t
anue, however, would not be per- q
for tho reduced rates t
would ultimately be productive OF
more revenue than higher rates, ]
lue to the increase in taxable +
Transactions" C
Rciterating arguments that the i
,ffect of high surtax rates Is to
Keep new capital out of productive g
and to prevent normal b
business transactions with the re- j
Iult that natural industrial devel- {
is retarded. Mr.. Mellon a
ldds: C
THE idea seems to be preva- 8
ent that in taxing large incomes, II
,nly the person receiving the in
'ome, and who is to pay the tax ''
s. really concerned. This is a mis- t
axe. For whatever the govern t;
nent takes, in the way of tax, out Il
If any income, which would 9TH f.
'rwise be saved and invested, and
hereby become part of the cap.
tai and Of the wealth of the ma s;
ion, affects not so much the indi. o
idual from whom it is taken as o
does the whole people of the 81
country, in the direct loss OF pro- a
Iuctive capital. fc
Wealth of the Country. 7
After all, the wealth of the So
ountry, upon which all the activ- Il
lies and the prosperity of our W
eople depends, Is made up of the
rivate property of the individual 81