Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1921-09-16
MELLON'S TAX
PLAN is BEATEN
Senate Finance Committee Votes
Down All SeCretary's Sug-
geStions Before 1t.
NO RETROACTIVE TAX REPEAL
Body Also Votes Unanimously for
Increased Income Tax Exemptions
for Heads of Families and
for Dependents.

Washington, Sept. 14.-The senate
finance committee voted unanimously
for increased income tax exemptions
for heads of families and for depend
ents.
The provisions of the house rev.
enge revision bill increasing the per-
sOnal exemptions from $1,000 to
$500 for heads of families having
incomes of $1,000 or less and the ex-
emptions for children and dependents
from 5000 to $500 each were approved.
All of Secretary of the Treasury
MELONS Tax recommendations that
came to a vote were rejected by the
committee, and the committee expects
to reject the remainder of the admin
istration tax program when it votes
on making the excess profits tax re-
peal retroactive.
Consideration of the rate sched-
ules will be completed by the finance
committee on Friday, Chairman Pen
rose announced, so that the bill can
be drafted and reported to the senate
on September 81
virtually the same measure that
passed the house. Senator Penrose
predicted that the finance committee
probably will refuse Mr. MELONS re-
quest to make the excess profits tax
retroactive. If this is done, Senator
Penrose said, Mr.. Melons recon-
mendation that $25O0OO,000 in addi-
tional taxes be levied on small tax
payers to make up for the loss Of the
excess profits tax would not have to
be carried out.
Personally" said Senator Penrose,
Il would be entirely willing to see the
excess profits tax abolished as of
January 1, 1921, but my suspicion is
that the committee will defeat me-"
The finance committee fixed 80 per
cent as the maximum Individual in
come surtax rate. This is the same
figure as fixed by the house. Mr..
Mellon had recommended that sur
taxes be reduced to % per cent, but
the senate committee rejected his pro-
posal without record vote.
The schedule of surtaxes will be re-
arranged by the senate committee.
Senator Penrose said the committee
was working on plan to have the
surfaces start at 1 per cent on in
comes of $4,000 instead of $1,000 and
increase the surtax 1 per cent for
each additional $1,000 of income in
stead of 2 per cent as at present.
The plan, if adopted, would mean
a reduction of surtaxes on incomes
from $4,000 to $4,000 The 80 per
cent tax would be levied on incomes
of $4,000 and over.
In deciding upon the house figure
for the surtax maximum the senate
committee drafted a motion to re-
duce the normal income tax rate from
per cent on incomes Of less than
$4,000 and S per cent on incomes
above that figure to per cent
Senator LaFollette made the mo-
tion to reduce the normal income tax,
but it was rejected without a record
vote. The senator announced later
that he would propose the reduction
in the senate as an amendment when
the tax bill is considered there.
The finance committee also ap-
proved the provision OF the house bill
permitting taxpayers to deduct net
losses against their income for the
succeeding year.
In addition to the excess profits
tax repeal the committee will vote on
Secretary MELONS recommendation
that one-half the present transporta-
ton taxes be retained for another
year and that the existing tax on cap
ital stock be repealed.
Senator Penrose said that the COM
mittee probably will refuse to retain
the transportation taxes and he pre-
dicted also that the corporation tax
of 1219 per cent fixed by the house
bill will be approved by the finance
committee. There is no disposition
on the part of the committee to in
crease the tax to Is per cent as rec
commended by Mr.. Mellon, Senator
Penrose said.