Every evening, Wilmington daily commercial., 1921-12-07
Tx ON BUSINESS
MUST Be ELESSENEO,
MELLON INSISTS
Reduction OF ourtax Would w.
tImatsly Increase Revenues.
hs Says In Report.
20 PER CENT AS MAXIMUM
Treasury Heads Attitude Un-
changed With Respect to
Bonus for Soldiers.
n, Associated rress To Every Evening

vision uf the tax laws with n rcduc-
ilrn ~ INA <imum Income surtax rate
tn 20 or 20 rcr cent and adjustment
of M. rates on business profits and
estates is suggested by Secretary
Mellon an his FIRST annual report.
transmitted to-day 90 Congress.
The secretary also announces that
the u~asury's policy with respect to
a.f.,m.nt ~ the soldiers bonus is
unchanged and urges prompt funding
ut tho ten billions of foreign loans as
"ona ~ the outstanding needs of the
present economic situation
Nr. Mellon also informs Congress
that the maturity within the next six
months ~ 81 zoe o0o eco OF the short
dated debt makes n imperative that
the government pursue n policy of
"a, utmost economy ana avoid new
undertakings that would throw add-
tianni burdens on the treasury and
,mhartnns the funding operations
with respect to the floating debt
NeVenue revision ~ tho subject upon
witch the secretary lays the most
stress Ito SAYS tho changes In the
tas law voted by Congress last month
"siVs substantial rclief Co business aud
industry and restore IN some measure
the freedom of business transactions,
lut eur system of taxation siih rc.
uutoa careful ana thoughtful con-
alteration" Ito then proceeds 60
taN that II the lnss of revenue result
ing from the reductions In surtaN and
other rate. suggested cannot he made
up. ny riria economy IN expcndi-
lures" II can be met either by plac-
lns tan on certain specific articles.
~ hv iow-rate gcncA,l tan on a
tHnad aclaHa ~ articles ur tranEac-
tlunH"
"u is ~ vital Importance, Mr..
Melton declares that adjustment he
made va our sohomc of taxation
whereby the burden will not fan un-
duly, either directly or indirectly,
upnn ANY particular class and az t.c
nAine time viii not seriously inter-
frre with productive industry and IN,
rnnsral prosperity ~ the country.
IL wuula not aocm either wise
nuuuasnrN to change from our pres
pnt aVstem ~ taVation to new and un.
trlud piana llV retaining 'hc incom,
hN with reasonable nurtaN rates
which n pva,p times uhsnatclN
nhnnld not tlsc above 10 yer cont. tax.
laNupH would still hc required 90 con-
tribute in proportion 60 their ability
10 paw while by placing a certain
amount of tan uu specific articles, OF
classes of articles or transactions
n, so low rate that they could rcadi
" hr borne without injury, the income
tAs could he materially slmplined
the tan laws could h. more readily ad
uinlsiprsd and az the same time tn
needed revenues would hc raised witt
uui the eva cn,Cts now resulting from
thU iVUsrrt excessive rates of taxa
tiOn
Mi Mellon Informs Congress tina
the amount ~ revenue involved IN th'
susrssi.d reduction ~ rates rs no
n.arly NJ srcat ss IL generally sup
posed
ITO reduce the surteN rates 10
maximum of 9h per cent ana gradual
mr she reductions through all tn
brackets" N, SAYS would mean al
nln,atrnt inss ~ about ,So zoe ,ooo Il
i,Nunus. A 20 per cent maximum rat
en- tho sam, basis would involve
revenue loss of about 100000 .ool
other sdiusin cnts which should b
mad. would probably involve a.
amount equal 90 that made In IN
surtax ratca This loss Of reVonu'
however, would not he permanent. 10
the reduced rates would ultimately h
productive of more revenue than high
~ rates. due 90 the increase In taNahl
transactions"
i,ri,eratlne arguments that IN
rnset OF hish surts> rates is 90 kee
new capital ou, VI productive enter
prise and &C prevent normal husincs
transactions with tho result IN,
natural Industrial development Is r,
iaried. Mr, Mellon adds;
"rhe idea s~einr 10 he prevalent tins
IN taxing iarxc incomes only the pei
son receiving the income. and who
~ pay the tar. IL really concerne
This is a mistake. Tor whatever n
ruNernm,n, takes IN the way OF Ia
uui - any Income, which would othei
visc nc saved ana invested. and ther'
ny become n part OF the capital an
uf the wealth uf the nation. affec
not Ho much the individual from who
u n taken, as lt does the whole pcop
~ the country. la the direct loss
productive capital.
After all, the wealth. .of the countr
uren which all the activities and n
prosperity Of our people depends,
inhu' up uf the private property OF n
indiYidunl citisens---of al the people
aud anything that unnecessarily talk
away from the accumulated proper
necessarily injuriously affects Il
peuilr as whole"
Discussing the proposed adjustme
uf lhs tak uu business profits, NJ
Mellon suggests no specific rates. b
salls attention that the repeal Of n
vNuuss fnuills tax made necessary !
increase ~ ~ per cent in the co
noretlsn lNcOmo tax that this, wi
"a. capital stock tax, makes the tot
levy on corporations approximate
it lef cent,
WHOM We remember" he writ,
that th. great bulk of the buslnc
~ tho country. both large and sma
N carried un under corporate form al
that the net income must largely
distributed in dividends. and that the
dlsldenas a., then In turn subject
sui,ss la the hands OF persons recel
ins them, u ~ AZ once seen that Il
resulting taxation 90 persons cngag
in productive business is very hea,
fot Instance a stuckholder subject
su,iss ~ 10 per cent really pays abo
~ per cen, on his dividends. while
siockholdet subject 10 SO per cc
snri~s would b. taxed about G5 n
cent op such pronts."
ps"in'lnv that there We're two "ch
objections" io th. present MI
"''"'" ,as rates, running up TO