Norwich bulletin., 1921-05-02

lon, with recommendation for early action so the new taxes can be applied for this calendar year. They are: | Repeal of the excess profits tax and the existing S2,Oo0 income exemption Of cor porations, the loss of revenue to be made good by modified tax on corporate prof i it's or flat additional income tax on corporations. to yield an aggregate of be- tween $40O 00O,000 and $500, ,O00. .OO0
 Readjustment of income tax rates So that no income will pay more than 70 per cent this year and g per cent. there after with a view to producing aggregate revenues substantially equivalent to the estimated receipts from the income tax under the existing law. Repeal of the so-called luxury taxes, together with the nuisance" taxes as those on soda fountain drinks. but reten- tion of the transportation and miscellane- ous specific sales taxes.
 Imposition of sufficient new and addi- ' tional taxes' of wide application" such as increased stamp taxes or license taxes on. the use of automobiles to bring the
 total revenues from internal. taxes after making the changes above. suggested to about .s4,Oo0 100000 in the fiscal years of l1922 and 1923.
 The treasury departments suggestions are contained in a letter to Chairman Fordney of the house ways and means
 committee, which was made public today
 at the treasury department( A copy of 1t
 also was transmitted to Chairman Pen
 rose of the senate finance committee
 NIT. Mellon suggests adoption of admin
 istrative amendments to the revenue laws simplifying collections and final settle ments and permitting. under safeguards, the carrying over of net losses by tax payers for one yeah as deduction from
 incomes of succeeding years.
 ''rhe treasury is not prepared" Mir
 Mellon says, ito recommend at this time any general sales tax and particularly If the general sales tax is to supersede the , highly productive specific sales tax now
 iil effect on many relatively non-essential
 articles"
 Mir. Mellon says also that he wishes it were possible to recommend the repeal of T the transportation tax. but adds that it i produces annually around S330 100000 . and it's repea lcannot be effected with lsafety unless congress has an acceptable . substitute to offer
 The secretary of the treasury also sug- e gests to congress that 1t may be "advisa-
 bie" to take action by statute or by con stitutional amendment to restrict further :. issues. of tax exempt securities. saying il 2 Is estimated that there are now outstand- U ing perhaps $I0. .o00. .ooe.000 of tax exempt :. securities, the existence of which "consti. lultS SLSlOuilC ENl OL the = tude"
 He points out that it is now the poIse, 2 of the federal government not to issu, T its own obligations free from profits ant Al surtaxes but that states and municipali l. ties are issuing full tax exempt securitie. '- in great volume. The continued issue O
 tax exempt securities. he adds. "e1cour s ages the growth Of public indebtedness : and tends to divert capital from produc u tive enterprise" le Emphasizing that expenditures for thi e fiscal year have. been at the rate of $. is oeO.o00.o00. Mir. Mellon warns congress
 that the nation cannot continue to spen, J. at this shocking rate" Substantial cut 1s in current expenditures, he says, offer tn Is only hope of effective relief from the la: ;s burden.
 "The last congress" he goes on to say
 made a creditable record in reducing ap
 propriations, and it effected substantia v economies. Notwithstanding the reduce
 appropriations, however. expenditure -e have continued unexpectedly high and tn . reduction in expenditures has barely key d pace with tue shrinkage in receipts. ,s "Rduction of appropriations. moreover will not of itself be effective to reduc ,- expenditures unless at the same time th io congress avoids or controls measure ',, which result in expenditures without a ' lapparent appropriation. Reappropriatio * of balances. revolving fun ,s appropriations and appropriations of re :. ceipts and other indefinite authorization
 of expenditure have in the past been re 7, sponsible for hundreds of millions of do oi lars of actual cash outgo.'
 i Mir. Mellon says that estimates for tli " fiscal year 1922 are subject to great ur
 certainty as to both receipts and expend
 lures. The estimated collections of ss
 70o,000,0o0 of internal taxes are base IS on the provisions of existing law. he adt
 ed. and are ss5o ,000.0O less than tf st estimated collections for 1921, chiefly b, ps cause of the shrinkage in business Id They are liable to be somewhat ful Tt ther reduced from the same cause" I he says adding:
 The estimated ordinary expenditur, nd of $4,014 900 coo will on their part ! fit effected by appropriations which are sti O. to be made. The estimated expenditur, or of the war department and the navy d. he partment,. aggregating over S110O. 900 .0i
 for 1922. will depend largely upon Il
 military and naval policy adopted by Il
 congress at the present session.
 The estimate of about S545 900 0l II for payment to the railroads in 1922
 made necessary by the provisions of q or transportation act and increased esi on mates from the director-general of ra TT roads. In aheence of drastic cuts ye military and naval expenditures, there ngd almost no prospect, according to the es or mates, of any substantial available su 1T plus even in the fiscal year of 1929" oD Urging early repeal of the excess p-c ed it's taxes. Mir. Mellon says an intellire ne' revision of these taxes should encoura
 production and in the long run increa
 rather than diminish the revenues. T
 profits taxes. the secretary estimates. W )N yield not more than S45o, ,G00. .000 for f
 taxable year of 1921.
 .v- As for a substitute for the excess pr, ut its taxes.s Mr. Mellon cites estimates ere S400 .060,0OO annually as 4 yield from J. additional fiat tax of per cent. on c, lr- porate. incomes. provided the exempti H. of s2.o00 now accorded corporations arl eliminated with the profits taxes. Su
 fiat tax, he adds. would be siInnle
 administration and easily determined He, the tax-Daying concern
 ,as Discussing the readjustment of jnco, rue tax rates. the treasury head says hiyl lad surtax rntes have reached tke point wh, 'm- they serve 10 drive capital into tax , to empt securities and thus reduce the vi vas of revenue. Revenue from the higi the rates. he declared. is rapidly dwindlI,
 and he believes that establishment of