The Washington herald., 1921-10-07
Tentative Agreemen n t
Makes Passage by SEN
ate Seem Assured.
HARDING APPROVES
PLANNED PROGRAM
After Colleague Confer
ence, Lodge Discussed
Bill With Executive.

AZ agreement which will insure
passage OF the tax bill by the Senate
with important amendments, sup
ported by nearly all the Repub-
ncans. became a certainty yester-
day.
A tentative understanding on the
proposed changes was reached at a
conference between Senator McCor-
mick. Of Illinois. leader of the COM
promise movement: Senator Lenroot,
of Wisconsin. and Senator capper,
OF Kansas. on the one hand, and
Senators Penrose. Watson and Lodge
on the other.
Senators Penrose. Watson and
Lodge indicated their willingness to
accept amendments in substantially
. the form In which they were worked
out In conference during the past
Few days. Senators Mccormick and
Lenroot were authorized to put the
amendments in shape for formal
presentation. The amendments will
be submitted to the full Republican
membership of the Finance Com
mittee today, and, IL approved,
as expected. will be offered in the
Senate as committee amendments.
The amendments as tentatively
proposed include the following:
surtax Rate 50 Per Cent.
A maximum surtsx rate of so per
cent instead of % per cent in the
pending bill, and IS per cent in the
present law, effective January /,
1922.
Reductions in all the surtax rates
on incomes below sss,0oo. the pend
ing bill proposing a reduction on
incomes of less than 100000. but
slightly increasing rates on incomes
between $40. 900 and s66. 900. effective
Retention of the present corpora
ton income tax Of 10 per cent on
corporations having a net income
Of less than 10000 with an increase
Of Is per cent on corporations with
larges incomes. effective January 1.
1922.
detention Of the corporation capt
tai stock taA which Is repealed in
the Senate bill.
Repeal Of the freight. passenger
and express taxes, effective Janu-
airy I. 1922.
An increase in the maximum rate
of tax on estates from IS per cent
to 40 per cent, this rate to apply
on estates above 500, 100000.
Repeal of some of the miscella-
neous nuisance" taxes which. are
retained In the pending bill.
Adoption of the Calder amend
ment increasing the tax on whisky
and alcohol
Under the agreement the excess
profts tax will be repealed. effec-
tive January 1, 1922, just as pro-
vided in the pending DILL.
Normal Tax Unchanged.
There will be no change in the
normal tax rates.
Senator Penrose and other Re-
publIcan leaders were reluctant to
accept the modification Of surtax
rates, but realized that IL they did
not do so q coalition between Re-
pubIicans and Democrats for higher
surtax rates was likely.
1t Is still somewhat uncertain as
IN whether a graduated corpora
tion income tax will be approved
or the fat rate of Is per cent, as
provided in the pending bill, ac-
cepted. The elimination of the
$4,000 exemption On corporations
was discussed. but tentative deci-
sion was to allow this exemption
10 remain in the BILL.
The Increased taxes on estates
rI1I produce only S14,0oO,0oo addi-
,Ionai. and 1t was argued by sena
,or Watson that this hardly made
n worth while making the change,
Senators Mccormick and Lenroot,
bowever, insisted that this increase
senator watson proposed that a
a-cent postage stamp be provided
Tor nrst class mail as substitute
for some of the miscellaneous
anuisance" taxes. This did not meet
with favor.
Lodge Calls on Harding.
FoIlowing the conference at the
1..,nitol Senator Lodge visited the
NybJta House and discussed the sit
nation with President Harding. IL
q. understood that the President
snproved the program.
pamocratic Senators took the oc-
o..ion to make speeches relative to
,hs Republican agreement Sena-
.ors Robinson, OF Arkansas, and
p.sd OF Missouri. declared that the
a,endments as tentatively agreed
20 by the Republicans had been
proposed by the Democrats, ana
that IL was . move " pLoHcHS H---NS
defeat
The tentative agreement killed
all chances OF the approval Of the
Sn,oot plan for 3 per cent pro-
Sr,ctIon or manufacturers sales tax.
Tn. opposition of the Republican
group, led by Senators Mccormick.
Isnroot and Capper. to this scheme
-. expressed by Senator Lenroot
a., .peech in the Senate. Senator
smoot replied with defense of the
tax.
senator Lenroot declared that N
utterly ignored the rule that taxes
shouId be imposed according to the
ability to pay" He insisted thar
the tax would be pyranided when
nas.ed along to the consumer.
senator Lenroot said that the tax
falls upon a business which, is OPP
srated at q loss as wen as one
,vhich makes q profit
Killed as Auto Runs Wild.