New-York tribune., 1921-04-12
Senate Starts
Tax Revision
On w Wedncsday
Repeal of Excess Profits
Clause and Reduction of
Burden on Incomes Are
Sure, Asserts PenrOsc
Sales Levies Offered
Bacharact Estimates His
Turnover Plan Can Be
Made to Yield Billion
From The rr4bune's Washington Bureau

WASHINGTON, April ll.-1aX re-
vision assumed prominence In both
houses of Congress almost from the
opening minute to-day.
Senator Penrose. chairman of the
Senate Finance Committee, announced
that the committee would be called to-
gether Wednesday for reorganization
and to lay plans for beginning prompt
ly the hearings on tax revision.
At the same time bills relating to
tax revision began their appearance in
the House. Representative Bacharach,
of New Jersey, introduced d bill to re
peal the excess profits tax and other
taxes and impose a new tax of 10 per
cent on the undistributed earnings Of
corporations Representative Luther
I w Mott, of New York, reintroduced his
sales tax bill
| Two things are practically settled al
ready with respect to tax revision, ac-
cording to Senator Penrose. One is the
repeal of the excess profits taxes and
the other is the reduction of income
taxes to "the collection point
Essential Says Penrose
"These two things seem to be set
ted on as absolutely essential to the
industrial welfare Of the country" said
Senator Penrose.
Just what the reductions in income
taxes are to be, Senator Penrode added,
has not been decided This will in
volve careful inquiry. One phase of
this inquiry VIII relate to whether
taxes on incomes below $4,000 are too
high and ought to be lowered.
AS to the transportation tax and
%'.,Rv
effect, while there is much talk Of their
abolition, Senator Penrose is not pre-
pared to say they will be abolished. He
suggested this afternoon that they
might be reduced.
There is very little complaint as to
these consumption taxes" said the
Senator. They may be reduced. As a
matter Of fact, they bring in about
SEQ 100000, and to abolish them would
strike heavily at the revenues. If all
fof these consumption taxes arc to go
and 1he bonus legis a.ion S passed. the
ship Of state viii be scra ching the
bottom in very short time"
Expects Bonus Legislation
Senator Penrose expec S to see bonus
leg station enacted at the present ses~
SION Of Congress. But how the money
Is to be raised to meet the REQUIRE
ments OF the bonus measure is some
thin; he has not worKed ont.
The sales tax viii be the first sub
ject considered by the Finance Com
mttee. Senator Pcntose is by no
means con5 inccd Of The wisdom Of a
sales TAX, bat says he wants 10 pre-
erve IN open mind regarding it. The
frtu : of the foreign debt end The do
mestsc debt will be carefully consid-
eled in the investigations Of the
Finance Commicteo, according to the
3 cha' 'rman- He reiterated day that
he did not look for q report from Sec
retary Mellon on the requirements Of
/ tho treasNrv for tvo or L rec uraa1s
! Representative Bacharach introduced
his tax revision bin with tne declara
ton that the Republican party was re-
turned to power on It's promise that
one OF the first acts OF Congress would
be the enactment of legislation carry
ing relief from the burdens Of excess
profits and other taxes Mr.. Bacharach
IS member of the Ways and Means
Comm ittee.
One Per Cent Turnover Tax
Mr.. Bacharach's measure would sup
plant the much criticized leves with 8
new tax Of 10 per cent on the undis
trlbuted earnings of corporations. The
bulk Of taxes to be replaced woulC
come from a l per cent turn over ia,
on sales of all kinds, including rea
estate, stocks and bonds, hotels ant
restaurants, garages and repair sta
TONS and places OF amusement. Undel
this feature he would allow a credit O.
$4,000 year, prorated monthly.
Representative Barharach would re
duce the normal tax on income.
up to and including $4,000 from d to
per cent and the surtax would begir
on incomes of $1,000 and up, instead O.
$4,000, as at present, the highest sur
tax rate being 40 per cent on income.
OF $4,000 or more. He also would re
/ peal the tax on freight and expires.
transportation. the insurance tax an,
taxes on all fountain drinks, admis
/ sions and dues.
4 Puts Yield at Billion
Mr.. Bacharach estimates that tht
yield from such l per cent turn over
TAX would be not less than $1,000. OOo
! 9oo and 1t is upon this estimate tha,
ne bases the changes proposed in his
Dill.
1t is going to require not less than
94'ooO'o00. 600 each year for the next
three or four years TO run the govern
ment, declared Mr. Bacharach in urg-
ing ms bill. Any revision Of the
tariff, he said, would not bring in re-
celpts greater than 100000 900
opposition to the sales tax is based
said Mr.. Bacrarach, on the impression
that it will add to the cost of living
and bear chiefly upon the small bust
ness man and people of small income.
Those who have studied the matter
carefully he said, agree that the aver
age turn over on all other commodities s
covered by the tax would not be greater
than three and one-half per cent added
to the cost to the consumer, while un-
Ger our present tax laws it has been
stated by government officials and con-
Cured in by statisticians and business
men of the country. that twenty three
per cent has been added