The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-09-09
RECOMMEND CHANGE.
In HOUSE TAX BILL.
Secretary Mellon Appears Before
Senate Finance COMMITTEES in
Interest Of Measure.
an The Aasoclated Prnesl

WASHINGTON, Sept. s.--Changes in
the house tax bill recommended today
to the senate finance committee by Sec
rotary Mellon. Included:
Repeal Of the excess profits tax, Of
fective as Of last january /. instead of
next January l.
Retention of all of the transportation
taxes for the calendar year 1922. but at
half the present rates. instead of complete
repeal as of next January /.
Repeal of the capital stock tax, effec-
tive next year, an entirely new proposal.
Reduction of the maximum income Sur
tax rate from So per cent to Is per cant,
effective January j. 1922, instead Of to
81 per cent as provided in the house bill,
An Increase of five per cent Instead of
2 " per cent In the normal corporation
income tax. making the total fifteen per
cent. retroactive to last January /.
manufacturers tax on cosmetics and
proprietary medicines to replace the pres
ent stamp taxes which were eliminated
by the house.
Retention next year of the taxes on in
suFance premiums. but at one-half the
present rates.
With these exceptions the treasury sec
rotary was understood TO have approved
the house measure with its provisions
for an increase of 500 in the exemption to
AoeNs1S % AdAatlioS having net incomes OF
$4,000 a year or less and 200 additional
for dependents; for decreased rates on
sporting goods, yachts and furs, and for
other manufacturers taxes on fountain
syrups and other ingredients of soft
drinks IN lieu of the present so-called
nuisance. taxes
Mr. Mellon was before the committee at
two sessions and there was general dis
cussion of his recommendations as well
as of the probable revenue needs of the
government for this fiscal year. The sec
rotary placed those at 81, 034, 600, 600 on the
reduction in expenditures agreed upon at
the white house tax conference last Aug
ust 3, and estimated that $780, O0o. 900 OF
this total would be raised from non-tax
sources, such as customs. salvage and the
like, leaving $3.324, 000,0 900 to come from
internal taxes
This total is s134, 600, 900 less than the
estimated receipts under the house bill
for this fiscal year. the difference being
accounted for through repeal Of the ex-
cess profits tax as of last January 1. 1t
was to make up the loss from the profits
tax that Mr.. Mellon proposed an addi-
tional Pa per cent increase in the cor
poration income tax, retention of the
transportation and insurance premium
taxes and. restoration of the taxes on cos
metics and proprietary medicines.
The additional corporation income tax
is estimated by the treasury officers to
yield approximately $3.50, 900 600 a year
The transportation tax would return
$3.50. 100000 next year at half the present
rates and the insurance taxes and the
levies on cosmetics and medicines an ad-
ditional $4,000, 600.
Explaining his proposal for further
reduction of the per cent in the mini
mum Income surtax rates, Mr.. Mellon was
said to have told the committee that the
lower rate would eventually return n
greater yield to the government than the
80 Per cent rate because additional money
would be diverted to active business in
stead of being invested in tax exempt
securities.
It was stated that there was nsA dis
cussion Of new sources of taxation ana
that none was recommended by Mr. MEL
Ion, who estimated that the house bin as
amended in accord with his recolnmen Ia
tions would meet the needs of the govern
ment, provided the economies agreed
upon at the white house conference were
effected.
AS to the authorization in the house
bill for the treasury to issue $780, 600, 900
additional short time notes, It was said
officially that this had no relation to any
anticipated deficit and was not wholly
necessary as the treasury had asked for
It merely with the idea OF having a little
more margin In funding victory notes and
certificates Of Indebtedness into short
term securities.