The New York herald., 1921-09-07
REPEAL OF TAX MAY
BE RETROACTIVE
Penrose Sees Sentiment for
Keeping Party Pledge on Ex-
cess Profits Levy.
FAVORED BY MELLON
Senate Committee VIII Re-
write Revenue Bill Passed
by House.
FAVORED BY MELLON

WASHINGTON, Sept. 6.--There il a
growing sentiment In the Senate Finance
Committee to make repeal of the Excess
Profits Tax retroactive to last January
/, instead OF effective next January 1. as
provided for in the House Revenue bill.
Chairman Penrose said to-day in an
nouncing that the committee expected
to complete tomorrow preliminary con-
sideration or the House measure.
1t is understood that Secretary Mellon
will suggest retroactive repeal OF this
tax when he appears before the COM
mittee Tomorrow to submit written
statement as to future Government
money needs. Such repeal was provided
for in the Tax Bill as originally drawn
by the House Ways and Means Com
mittee. but Republican members OF the
House voted in conference to postpone
the date to January l. 1922.
Members OF the Senate Committee are
understood to take the position that the
Republican party made a definite prom
ise to repeal this tax Immediately. and
that this Is settled pledge in the
public mind The same position was
taken by most Republican members of
the House Committee, but Western Re-
presentatives led successful fight for
retention of the tax for this calendar
year.
s4So.ooo,ooo Revenue Loss.
Treasury experts have estimated that
retroactive repeal of this levy would
cut $3.50. 900, 900 from the revenue total
In the next calendar year, making the
income on the basis OF the House bill
s2,54o,00o,00o for 1922. The House
Committee also proposed retroactive re-
peal of the Income Surtax brackets IN
excess Of 32 per cent. estimated to cut
an additional $90,000.000 from the
yearly revenue. The matter Is yet to be
taken up by the Senate Committee.
A new feature in revenue legislation
now under consideration by the Senate
Committee would make possible speedy
refunding OF taxes improperly paid.
Treasury experts have been asked to
draft such a provision, Chairman Pen
rose said, adding that the Government
had been holding funds due taxpayers
for two or three years and that no
interest was allowed or credit given
on future taxes.
VIII Rewrfte House Measure.
other matters considered to-day by
the committee included house provisions
for taxing insurance companies. admin
istrative provisions of the income tax,
repeal of the transportation taxes and
an additional tax OF $4.20 a gallon on
alcoholic liquors withdrawn for nom
beverage purposes and diverted to bev-
erage us9. So far as was made known
no formal decision was reached on any
of these features.
After hearing Secretary Mellon, the
committee expects to get down to the
real work OF drafting bill for presen-
tation to the Senate after Congress re-
convenes September p. The House
measure will be rewritten. but to what
extent the changes in levies will be
altered remains to be decided.
The present plan is to call in the
Democratic members of the committee
while this bill is being drafted, Chair
man Penroses explaining that the Re-
publicans participated in the framing
of the 1918 revenue law when the Demo-
Gratis were In control of the Senass.