Evening journal., 1921-09-09
MELLON HAS
new TAX BILL
Secretary Proposes Increase
to 5 Per Cent. in Normal
Corporation Charge
URGES CUT OF
INCOME SURTAX

WASHINGTON, Sept. Changes
in the House tax bill, recommended
to the Senate finance committee by
Secretary Mellon included:
Repeal of the excess profits tax
effective as OF last January /, instead
Of next January 1.
Retention Of all OF the transporta-
tion taxes for the calendar year
1922, but at half the present rates
instead OF complete repeal as Of next
January /.
Repeal OF the capital stock tax, ef-
fective next year, an entirely new
proposal.
Reduction Of the maximum in
come surtax rate from SO per cent
to 25 per cent, effective January l,
, 1923, instead OF the 80 per cent. as
provided in the House bill
An increase Of per cent instead
Of 1-2 per cent in the normal cor
poration income tax. making the
total is per cent, retroactive to last
January 1.
A manufacturers tax on cosmetics
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.
With these exceptions. the treas
ury secretary was understood 10
have approved the House measure
with its provisions for an increase
Of $500 in the exemption in the ex-
emption TO heads OF families having
net incomes of $4,000. year or les,
and 5000 additional for dependents
. for decreased rates on sportinf
goods, yachts and furs and fol-
manufacturers taxes on fountain
syrups and other ingredients OF sof
drinks in lieu Of the present so
called nuisance taxes.
Mr.. Mellon was before the com
mittee at two sessions and there wa
general discussion OF his recon
. mendations as well as Of probabl
revenue needs Of the government 70
this fiscal year. The Secretar.
placed these at s4.034,0o0.000 on tn
basis Of the reduction in expendi
lures agreed on at the White Hous
tax conference last August Q an,
estimated that $500. 10000 Of thi
total would be raised from non-ta
sources, such as customs. salvag
and the life, leaving S3,234. 900, 90
10 come from internal taxes
This total is $4,000. 600 less tha
the estimated receipts under tn
House bill for this year the differ
ence being accounted for throug
repeal Of the excess profits tax as o
last January 1. 1. was TO make u
the loss from the profits tax tina
Mr.. Mellon proposed an additions
2A per cent increase in the corpo
ration income tax, retention OF tn
transportation and insurance pre-
MUM taxes and restoration OF N
taxes on cosmetics and proprietar
medicines.
The additional corporation incom
tax is estimated by treasury ofis
ials to yield approximately $3.50
10000 a year. The transportatio
tax would return. 10000. 900 ne,
year at half the present rates an
the insurance taxes and the levies o
cosmetics and medicines an add
tional s25.000.000.
Explaining his proposal for a fui
ther reduction Of per cent in III
maximum income surtax rates. M
Mellon was said to have told N
committee the lower rate eventual
would return a greater yield 20 II
government than the 80 per cent, b'
cause additional money would be d
verted to active business instead
being invested in tax exempt secui
tiles,
A net deficit OF s161.464.774 in II
current expenses OF the governmei
for the first two months OF the pre-
ent fiscal year was announced Z
.r day by Secretary Mellon in a le
ter to banking institutions offerir