The Washington herald., 1921-08-11
SMALL INCOME
TAXEXEMPTlON
MEETSDEFEAT
Dependents Allowance Is
Raised to 500 by
Committee.
LEVIES ON EXCESS
PROFITS DROPPED
Corporation Tax Goes Up
To Is Per Cent; Change
From First Plan.

met defeat yesterday in the House
Ways and Means Committee with
the exception that the allowance
for each dependent was increased
from $500 to $500.
The suggestion was advanced
that the present exemption Of sl,-
900 for single persons and $4,000
for heads OF families be increased
to $500 and s2,5oo respectively.
Chairman Fordney and other MEM
bers of the committee favored this
action but later 1t was decided not
to increase the exemption applying
to single persons but the proposal
to increase it for heads of families
was regarded favorably. A sug-
gestion was made that the in
creased exemptions be limited only
to incomes of less than $4,000. FL
naIly, however. the committee
voted against any change except in
the exemption for dependents.
Changes Is ErOSra"-
An increase in the exemption for
both single persons and heads OF
families would have meant a loss
In revenue of between S40,000.ooo
and $50, 100000. In connection with
this discussion. the advisability OF
decreasing the 4 per cent normal
tax to 3 per cent was brought up
but speedily voted down
The committee made a number
of important changes in the pro-
gram as agreed upon at Tuesday
nights conference between Presi-
dent Harding. Secretary Mellon and
RepublIcan House leaders. Among
them were the complete repeal OF
freight, passenger and Pullman
TRANSPORTATION taxes instead OF cut
ting them in half and an increase
In the nat corporation income tax
from IL 1-2 per cent, the figure
proposed Tuesday night to Is per
cent. The tax on express will re-
main
The result of yesterdays changes
vas To make a further net decrease
of $50. 5000 in anticipate reye-
nues As the bill now stands, the
xisId will be ,555, 900. 900 less than
The amount which the present law
is estimated to yield in the nscai
wear 1922. The bill as 1t STOOD
Tu.sday night, represented a cut
~ sIe5. Ooo, 900. The yield from IN
,arrsI taxes now is figured at sS'-
eso 400 600 II no further changes
are made
Taxes Now Approves
tn. committee approved formally
vesterday most of the features oi
the program at the White houss
conference. A statement
from the committee shows tnat to,
mai approval was given to the l0i-
lowing: e., or
oorporations, retroactive 10
January l. or-
Increase of the income tax on col
porations from the present 90
of 10 per cent and the proposeo a.
of 12h per cent to 10 er cent @ie0
retroactive 10 last Sea
Retention OF the $4,000 exemtloh
nnIving 10 incomes of corporations
EIimination Of surtax above tne
80 nar cent tax on incomes above
ssS 900 and retention or present
rowsr surtaxes, retroactive to Janu-
airy 1, 1871
increase of the exemption 10 heads
a, families on account of children
a.zn,dants from 5000 to
$500.
Remoyal of transportation taxes
on freight. passenger. seats anu
berths. effective next January i.
Repeal of soda fountain tax ana
substitution of a tax on the manu-,
facture of syrups and carbonated
gas of 5 cents q pound.
A change in the tax on cereal oeV-
erages from Is per cent ad yalorem
to Is cents per gallon
A change In the tax on fruit juices
and all carbonated beverages from
10 per cent ad valorem to cents
per gallon
finished and fountain syrups.
Repeal of the proprietary stamp
tax and substitution OF q tax .rf
per cent on the manufacture of tooth
paste, tooth powder, etc, and on
proprietary medicines.
Exemption from taxation Of the
first $500 in stock and interest re-
ceived as dividends from building
and loan Associations as a means OF
encouraging construction.
There will be no bar placed on ar
mament delegates bringing in all
the LIQUID refreshments they can
carry in their handbags, trunks and
othea luggage, and once IL is safely
delivered to their quarters in Wash
inxton, they will be free to dispense
IL as they wish.
Andrew volstead, papa OF the pro-
hibItion act. Is not disposed to at
tempt any Interference with the
diplomatic right Of the foreign dele
gates, be said yesterday
Discusses -the Eject.
The effect will be local." Vol
stead said, "and won't appreciably
Increase the general wetness OF the
COUNTRY. The friends Of the for
efgners will have access to a larger
liquor supply. but II the visiting
diplomats want to carry on" it VIII
be their own responsibility"
Small wonder, ali in all, that
Washington Is socially in highly
developed stage OF acute anticipa-
ten.