Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1921-10-07
Radical Changes Proposed
By Coalition Forces Are
Accepted
TRAFFIC TAXES CUT
Maximum Surtax Allowable Is In
creased From Thirty-two to Fifty
Per Cent.

Washington, Oct Radical re-
vision OF the Taxation bill in the
Senate became assured today, when
the regular Republican forces capi.
tulated IL the face of the coalition
between the Democratic minority,
the so-called G. 0. P. progressives
and members of the "agrarian bloc. .
The Finance Committee, with its
bill doomed to defeat unless amend
cd, will meet tomorrow to receive
the notifications of the insurgent
group that now holds the whip hand
This meeting will follow a series OF
conferences today and last night, at
which Senator Lodge, the Repub!i
can floor leader, was informed that
the bill could not pass as written BY
the Penrose organization in the Ser.
ate. The Finance Committee is cX
pected to accept the ultimatum of
the coalition group and TO report as
committee amendments" substantt
ally all the changes demanded.
Conferences so far and virtual
agreements between the two sides,
indicate the amendment of the Tax,
alton bill in the following particu.
lars:
A maximum surtaX rate of 80 per
cent, instead of 32 per cent, in the
pending bill and 65 per cent. in the
present law, effective January /, 1922
Reductions in all the surtaX rates
on incomes below 100000 the pend
ing bill proposing reduction on IN
comes Of less than $4,000, bat
slightly increasing rates on incomes
between $4,000 and $4,000 effec-
tive January /, 1922.
Retention of the present. corpora.
.tion income tax of IL per cent on
corporations having net income OF
less than $4,000 with an increase
20 Is per cent. on corporations with
larger incomes, effective January !,
1922.
Retention of the corporation cap;
tel stock tax, which is repealed in
the Senate bill.
Repeal of the freight, passenger
and express taxes effective jana
ary l, 1922.
An increase in the maximum rate
Of tax on estates from 25 per cent.
to 40 per cent, this state to apply oa
estates above S100,0O0,0OO.
Repeal of some of the miscellan-
eous nuisance" taxes which are re-
tanned in the pending bill.
Adoption of the Calder amend
ment increasing the tax on whisky
and ;:icohol.
Under the agreement the excess
profits tax will be repealed, effective
January l, 1922, just as provided III
the pending bill. There will be no
change in the normal -aX rates.
The tentative agreement killed ali
chances of the approval of the Smoot
Plan for 8 per cent, production or
manufacturers sales tax. The oppo-
sition of the Republican group, led
BY Senators Mccormick, Lenroot and
Capper, to this scheme was expressed
by Senator Lenroot in speech IN
.he Senate Senator Smoot replied
with a defense of the tax.
In opposing the Smoot sales tax
Senator Lenroot declared that 1t
utterly ignored the rule that taxes
should be imposed according to the
ability TO pay" He insisted that
the tax would be pyramided when
paSSeu a!ollS W litS Soi'u'i.>''
Senator Lenroot said that the tax
falls upon a business which Is ope-
rated at a loss as well as one which
makes q profit.
Senator Lodge conferred with
President Harding today regarding
the changes that must be made in
the bill Details Of the conference
were not forthcoming, but apparent
~ the President gave his 0. K. as
there seemed to be general under
standing in the Senate later that the
bill would be rewritten.
The overthrow OF the Republicans
of the Finance Committee on a bill
of this Importance is almost without
precedent. Acceptance of the COM
frn,.:o,ol - ,.. .al.N