Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1921-11-18
.HighSurtax
Is Passed
By House
Express Wish Of President Dis
regarded in Action on SO
Per Cent Amendment
To Bill.
Final Vote, 2Ol to lE

dilcnullcnt 10 inc TAX IcNlsiol Diil
fixing the maximum income surtax
rate at 50 per cent on incomes OF
500. 900 or more.
Ninety-four republicans, most OF
them from the middle and far west,
joined with the practically solid
democratic minority in supporting
the amendment. Announcement of
the result brought applause from
both sides with some democrats
cheering.
Harding Suggests Compromise.
- Three hours before the vote was
taken the house listened TO the read
ing OF letter from President Hard
ing to Chairman Fordney of the
ways and means committee, suggest
ing that the house and senate COM
promise.
The executive said he still be-
licved the original house rate ,of 81
per cent was nearer to just levy"
but that, in view OF the legislative
situation, he thought it wholly de-
sirable" that there be compromise
at 40 per cent.
Immediately after it became
known that the president had writ
ten Mr.. Fordney, spokesman for the
''insurgent" republicans said that
the letter would not affect the result.
They had claimed 50 republican
votes, or one less than was cast for
the amendment.
Settles Big Issue.
This vote settled the biggest issue
between the house and senate on
the tax revision bill and the man
ayers from the two houses will re-
sumo their sessions tomorrow with
the hope OF reaching an agreement
on the bill by Saturday night.
Intervention of the president in the
tax revision fight-the second since
the ways and means committee be-
gan drafting the measure three and
half months ago-followed visit
to the White House today by Repre-
sentative Mondell, republican leader.
The president then summoned Chair
man Fordncy and Representative
Longworth OF Ohio of the ways and
means committee and expressed his
views on the surtax. These were
supplemented by letter 10 Mr..
Fordney.
President Attacked.
During the three hours debate in
the house, which was conducted un-
der special rule, the president was
attacked for writing Mr.. Fordney.
Representative Frear, republican,
Wisconsin, said the presidents inter-
vention at the last minute" was
unfair and unjust"
Representative Garner, democrat,
Texas, declared that if the president
had views to submit he should have
done so in person or in message,
rather than in letter. Representa-
tive Sinnott, republican, Oregon, de-
cfarcd he "grieved because the presi-
dent had been given bad advice on
this subject"
Supporting the presidents stand,
Representative Mondell and other
republican spokesmen said that the
republican party had promised to re-
duce taxes and that the so per cent
rate should not be approved by the
house.
Text Of Harding's Letter.
The letter written by President
Harding to Chairman Fordney fol-
lows:
MY Dear Mr.. Fordney:
"In response to your inquiry as
to the wisest course in dealing with
the differences between the congress
in higher surt2x on incomes, | can
say only in view of our earlier con-
mate adoption Of the higher surtax
rate of 81 per cent, | still believe
the rate approved by the house to
be the nearer to just levy and the
iuore promising one in returns to
the public treasury.
The administration is anxious,
first of all, to lay necessary taxes
10 meet demands of the treasury.
There is moral obligation, howcrer,
on the party in power to do every
thing possible to keep faith with
promises made.
1--WE have been collecting the high
est surtax on incomes levied at this
time in the world. The effect has
been the restriction of the easy flow
of capital in the channels most es-
sential to our normal and very nee
essary activities. No one challenges
the levy of the higher tax in the
stress of war, but now we are strug-
CLING for the readjustments of
peace.
Urges Compromise.
Where there is so wide a differ,
enee in the judgment of the two
! houses. l have thought it might be
! possible and wholly desirable, to
reach an equitable compromise, say
maximum surtax levy of 40 per
cent. This would put the higher
federal tax en- income at 4S per cent.
which would measurably meet the
expectations of those who are, above
all else, concerned with the return
OF hopeful investment of capital and
the application of our capital re-
sources to profitable productivity. l
am wholly confident that the helpful
results spreading therefrom to every
active participant in our industrial
: Id economic life. from management
: > every wage Garner, would be vast
y more advantageous to our people
xhan the maintenance of wartiWe
4 ievies as peace time penalties on cap
ital, which are certain to hamper the
restoration of our activities for which
We all so much hope.
One experience will afford con-