The Seattle star. [volume] (Seattle, Wash.) 1899-1947, 1921-05-06
TAXATION
plans ARE
IN MIDDLE
Hope OF Senate and House
For Effective Team Work
Seems Doomed to Failure
~ IL. u. Ill NJ

ny II. n. III NJ
WAsfIINGToN, May 6 Hope 81
senate and house leaders that cffcc
tive teamwork could be developed IN
shaping the new revenue law seems
doomed to failure.
Not only have radical differences
developed between house ana senate
commlttce members. hut each house
Is 50 divided that the 5ai members
would report sat separate bills II
zach had his way.
Secretary OF the Treasury Mellon
has not formulated any specific rec
lamentations. and probably will not
Mellon Will make suggestions De-
fore the senate finance committee.
HARDlN6'S
STAND
The one specific recommendation
In President Hardlng's message was
the repeal OF the excess profit tax.
Further than that he stipulated only
-thc revision or repeal OF those taxes
that have become unproduettse ana
arc 50 artificial and burdensoine as
20 defeat their own purpose
Fun data Is being gathered BY ex'
perts In the treasury department 20
show whether each sort OF tax now
collected has proved practicable or
has failed. This material Mellon viii
prvsent before the committee. and on
the facts shown the committee Will
BE- expected to base It's conclusions.
PRESENT
TANES
Taxes now levied BY Uncle sam,
under the existing law. are OF III gen
eraf classes:
Income taxes. both for individuals
and corpora tons
Excess profits taxes
Excise taxes. including the 50
called luxury" taxes.
Estate taxes.
transportation and communication
taxes.
Taxes on beverages
Taxes on cigars and tobacco.
Taxes on admissions and dues.
Special taxes
Stamp taxes.
Child labor tax.
II is in the three groups Of income.
excess profits and excise taxes that
the greatest revision by the present
congress is likely.
Next TO ti4e repeal of the excess
profits tar the changes that may be
st down as definite are:
Sealing down OF the surtaxes on
large Incomes
Increase in corporation tax rates.
Some sort OF sales tax.
In addition to these IL In probable
there win be return to scent letter
postage. cent from the sale OF each
stamp going into the general rev
enues. an increase in the tax on
stock sales. and the repeal OF the
majority OF the luxury taxes. except
those on automobiles, pleasure boats
and few similar articles.
The theory behind the repeal OF
The luxury taxes would be that a
fAir tax on all luxury purchases
would be secured thru ve sales tax.
TAKES
MULTIPLY
In the case OF automobiles. motor.
cycles. tires and motor accessories
and mosorboats. yachts and other
pleasure crafts. under Senator
Gmoot's proposal. the present tax OF
from to 10 per cent would be col
lected on the final selling price. In
addition. II the turnover type of sales
tax be adopted. there would be a !
per cent tax on each stage Of produc.
ZION which involved a sale.
II Is over the turnover feature of
the sales tax that the biggest fight
seems certain to wage.
Smoot's bill is regarded as the
basis from which the senate com.
mittee will work. This bin provides:
I'm addition 70 all other taxes.
there shall be collected upon ALL
GOODS. WARES OR MERcHAN
Disc. sold or leased on or after July
1. 1921. a tar equivalent TO 1 per
cent Of the price for which sold or
1easesi; such tax TO be paid by the
vendor or lessor"
PILING UP
PRICES
The tax. as may be seen. does not
apply alone TO the final sale. but TO
every transaction along the line from
the producer Of raw materials 90
the retailer OF the finished product.
Thru the various stages OF manu-.
facture and distribution. there is vir.
tusIly no article which would reach
the consumer with less than s per
cent added for the sales tax. and
IN most cases the tax would reach
from to Is per cent.
Next TO the sales tax fight will
come the battle over revision OF the
income surfaces Figures being gath.
cred by the treasury are expected 10
show just at what point the high
surfaces begin driving large incomes
INTO tax-free securities.
Present surtax rates run UP 10 SIS
per cent on incomes OF over 81 900.
900 This maximum may be cut 20
40 or even 30 per cent
SHIFTING
THE BURDEN
To offset any losses due to this re
vision Of the higher surtax rates. an
Increase IN corporation taxes viii be
urged. probably In the way Of cor.
poration sIirtaxes
As always. there viii be tho pro
posaI to scale up the rates Of taxa.
ton on the lower rates OF income.
thus placing the burden on the great