Free trader-journal and Ottawa fair dealer. (Ottawa, Ill.) 1920-1927, 1921-12-07
TREASURY CHIEF
URGES REDUCTION
Of SURTAX RATES.
POINTS OUT THAT PRESENT LAW
RETARDs BUSINESS DEVELOP
MENT-pEPARTMENr coNTlN'
ues TO OPPOSE SOLDIERS 30.
NUS,

Washington, Deco. Further re-
vision of the tax laws, with a reduH'
ton of the maximum increase in sur
tax rates to 20 or 25 per cent and adj
justment of the rates on business prof
its and estates, is suggested BY Sec,
Mellon IN his first annual report
transmitted today to congress.
The treasury secretary also an
nounces that the treasurys policy
with respect to deferment Of the
soldiers bonus is unchanged, and ny
ges prompt funding Of ten billions OF
dollars Of foreign loans as one OF the
outstanding needs of the present &C.
onomic situation"
Mellon also informs congress that
the maturity within the next six
months OF S6,750,000,000 Of the short
dated debt makes It imperative that
the government pursue policy OF
the utmost economy and avoid new
undertakings that would throw addi'
tional burden on the treasury and en-
barrass the funding operations with
respect TO the floating debt,
Revenue revision IS the subject up
on which the secretary lays the most
stress. He saws the changes in the
tax laws voted by congress last
month gave substantial relief 10 bu,!'
ness and industry and restored in
some measure the freedom Of bust.
ness transactions, but our system OF
taxation still requires careful and
thoughtful consideration He then
proceeds to say that If the loss OF
revenue resulting from the reduction
OF surtax and other rates suggested
cannot be made up by a rigid econ
omy in expenditures il can he met
either by placing tax on certain
specific articles or by low rate gen.
eral tax on a broad class Of articles
or transactions.
ut is of vital importance" Mellon
declares. that adjustment be made
in our scheme of taxation whereby
the burden will not fall unduly, either
direct or indirectly upon any par
ticular class. and at the same time
will not seriousl interfere with pro
ductive industry and the general
prosperity of the country
1T would not seem either wise or
necessary to change from our present
system of taxation to new and untriad
plans. b. retaining the income tax
with reasonable sdrtax rates, which
in peace times ultimately should NO
rise above ten per cent, tax payer.
would still be required TO contribute
in proportion to their ability to pay
while by placing q certain amount o
stax on specific articles, or classes o
articles. or transactions, so low rate
that they could readily be borne with
out injury, the income tax could BE-
materially simplifed tie tax law,
could bs more readily administered
and at the same time the needed rev
pnues would be raised without the
veil effects now resulting from thu
present excessive rates Of taxation.
Mellon Informs congress that the
amount of revenue involved in the
suggested reduction of rates is no
nearly as great as Is generally sup
posed.
"re reduce the surtax TO a maxi
mum of % per cent and graduating
the reductions through all the brack
cts" he says. would mean an ap
parent loss OF about S130000.0 II
revenue. a 20 per cent maximum
rate on the same basis would involve
b revenue loss Of about S200,000,00
Other adjustments which should BE-
made would probably involve al
amount equal to that made in tn
.surtax rates. The loss of revenue
however, would not be permanent
for the reduced rates would ultimate
jy be productive of more revenue
than higher rates, due to the in
crease in taxable transactions
Reiterating arguments that the Of
feet OF high surtax rates is to keel
new capital out Of productive cnter
prises, and to prevent normal busi
irauo +rao~arfic,e With tha raerIt ffa