Omaha daily bee., 1921-08-11
In
Defeated
Proposal to Incresae Individ.
ual Exemption Beaten in
House Committee - Al.
lowances Boosted 5000.
Levy on Fares Repealed

Washington, Aug. l0.--Proposals
to increase tax exemptions applying
to individual incomes met defeat to-
day in the house ways and means
committee. with the exception that
the allowance for each dependent
was increased from 5000 to $500.
The suggestion was advanced that
the present exemption of $1,000 for
single persons and $1,000 for heads
of families be increased to l,S00 and
s., 500 respectively. Chairman Ford
ney and other members OF the conf
mittee favored this action, but later
it was decided not to increase the
exemption applying to single per-
sons, but the proposal to increase it
for heads OF families was regarded
favorably. A suggestion was made
that the increased exemption be
limited only to incomes of less than
$1,000. Finally, however, the COM
mittee voted against any change eS-
cept in the exemption for depen-
dents.
An increase in the exemption for
both single persons and heads OF
families would have meant loss in
revenue of between $40,000,000 and
$50,000000.
Plan Voted Down.
In connection with the discussion
the advisability of decreasing the 4
per cent normal tax to per cent
was brought up, but voted down.
The committee made number OF
important changes in the program as
agreed upon at last nights confer
ence between President Harding,
Secretary OF the Treasury 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 fiat corporation income tax from
121-2 per cent, the figure proposed
last night, to Is per cent. The tax
on express will remain.
+ The result of today's changes was
to make a further net decrease of
60,00O,000 in anticipated revenues.
As the bill now stands, the yield will
be $555.000,O00 less than the amount
which the present law is estimated
to yield in the fiscal year 1922. The
bill as it stood last night repre-
sented a cut of $4lo,0O0,000. The
yield from internal taxes now will
be $30200O0,0O0 If no further
changes are made.
Program Approved.
The committee formally approved
most of the features of the program
as framed at the White House con-
ference. A statement issued from the
committee shows that formal ap-
proval was given to the following:
Repeal OF the excess profits tax on
corporations, effective January ],
1921. .'.
Increase of the income tax on cor
porations from the present fiat tax Of
10 per cent and the proposed tax OF
II IL per cent to IS per cent, ef-
fective January /, 1921.
Retention of the $1,000 exemptions
on the income OF corporations.
Elimination OF surtax brackets
above the 32 per cent above 100000
and retention of present lower sur
taxes effective January /. 1921.
Increase OF the exemption to heads
of families on account of children
or other dependents from $500 to
$400.
Removal OF transportation taxes
on freight, passenger. seats and
berths, effective January |, 1922.
Repeal of soda fountain tax and
substitution of tax on the Tanr-
facture of syrups and carboaated gas,
of 5 cents pound
Change Beverage Levy.
A change in the tax on cereal
beverages from IS per cent I'd val
orem to Is cents per gallon.
A change in the tax on iruiJ juices
and all carbonated beverages from
10 per cent ad valorem to : cents
per gallon.
A tax OF 10 cents per gallon on
finished and fountain syrups.
Repeal of the proprietary stamp
tax and substitution OF tax of 5
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