The New York herald., 1921-08-02
4 IL BILLIONS need
OF U. S; MELLON FOR
$1OAUTOMOBLE TAX
Secretary Also Recommends
Stamp Tax on Bank
Checks and Higher
Tobacco Levy.
ASKS 3 CENT POSTAGE
Would Repeal Excess Prof
it's, Soda and Ice Cream
and Cut Transportation
and SurtaXes.
OPPOSITION EXPRESSED
Hopes Government Expenses
for Fiscal Year May Be
Reduced to $780,
100000.
OPPOSITION EXPRESSED

Special Despatch to THE New York HERALD.
New York Herald Bureau.
Washington, ID. c., Aug. 1. y
Three new tax levies were proposed
10 the House Ways and Means Com
mittee to-day by Secretary of the
Treasury Mellon in presenting the
views on revenue revi-
sion. The new taxes and suggestions
were:
A fiat Federal license tax of
$40 on all automobiles.
A two cent stamp tax on all
bank checks.
A three cent rate on first class
mail matter in place of'the present
two cent postage.
Increase Of the tobacco taxes so
that $100, 900, 900 a year additional
will be obtained.
Repeal of the excess profits tax,
with increase from 10 to Is per
cent in the fiat corporation in
come tax as a part substitute.
Repeal of the soda water and
ice cream levies and a few other
so-called nuisance" taxes.
Reduction OF the transportation
taxes by half during the present
year. to be followed by their entire
repeal next year.
Reduction OF the surtax rates
all along the line. so that the maxi
mum Will be 40 per cent instead of
73 per cent. as Mt present on the
highest incomes.
Mellon startIes Comm ittcc.
Secretary Mellon startled the com.
mittee by stating first that the Govern.
ment expenses for the present fiscal year
might run up to $4,000, 900. 900. but thai
they might be cut to 81. SOC. 200. 900.
Secretary MELONS statements ant
came as surprise. the com.
mittee being of the opinion that the pres
ent revenue revision problem could b,
solved BY repeating the excess profits
and nuisance taxes. by reducing the sur.
taxes and by increa sing the flat corpora.
tion income tax to 15 per cent.
Mr.. Mellon. with other Treasury OF
hcials, including David ii. Blair. Com.
missioner of Internal Revenue ; Joseph S
Mccoy. Actuary, and DR.. Thomas S
Adams. tax expert. were with the com
mittee for nearly three hours, and 1t Ii
the new taxes meet with al.
most general disapproval in the commit.
tee. From the present viewpoint, sew.
erai members are understood to have ex.
pressed the opinion frankly that the pro
posals. because they affect SO many peo.
pie directly, might be disastrous for the
promised during the campaign to reduce
taxes.
Expenditures Uncertain.
The committee. Chairman Tordney
stated after the conference, has not de-
cided what must be the total amount
of revenue to be raised by the bill. The
uncertainty as to just what the Govern
ment expenditures will be during the
year is caused partly by the
fact that the Treasury Is uncertain how
much must be paid by the railroads or
Just what other expensive legislation
will be passed. The experts informed
the committee that IL the Government Is
forced to spend $4,000, ,ooo.o 900 there can
be no substantial reduction under pres
ent taxes, because these rates are now
yielding gradually diminishing return,
The tax on automobiles aroused con
opposition in the committee. bu
Mr.. Mellon said he considered II fai,
that the motor car owners be compelIct
TO pay the 800, .00o which the Fed
eral Treasury has been annually givins
to the States to aid In road building
There are approximately 10000, 900 me-.
tor vehicles In the country, so II woulc
yield approximately that amount. TIL,
for fiat tax under which tn,
Ford would pay the same as a Pierc,
Arrow did not meet with favor with ths
committee and II Is probable that IL thi,
tax Is adopted II will be based on hors,
power or weight.
The transportation Tax.
Mr.. Mellon agreed with the committe,
that the transportation taxes should b,
itpteitu NJ the tdTiieSt uate possible. Du
doubted that the Treasury could afrort
this year TO lose all the s330, 600, 900 an
rual revenue that they produce. Th,
Secretary said he felt certain II coult
be abolished next year after being GU
in half this year.
Figures presented to the committe,
showed that the excess profits hav,
TO about one-ffth the maximum
during the years of big profits. IL wa,
stated that the tax this year .robabi,
would not yield more than s450.00O, 900
In this connection the repeal OF tn,
capital stock tax was discussed with
the suggestion that the fiat corporation
Income tax be increased above is pei
cent. DR.. Adams thought this might b,
done by Increasing the fiat tax to is OF
II per cent.
Mr. Mellon told the committee he rec.
reduction OF surtax rates, rot
to relieve the rich. but because the high
rates now imposed have passed the poin,
Of maximum return. More revenue will
be derived from the lower rates because
the high ievies have driven capital into
tax free securities, he said.