The Bourbon news. [volume] (Paris, Ky.) 1895-19??, 1921-09-13
NEW TAX RATE TO BE CONSID-
Erred

WASHINGTON, Sept. 9.-Changes
in the House Tax Bill, recommended
Thursday to the Senate Finance
Committee by A. w. Mellon, Secre-
tary of the Treasury, included:
Repeal of the excess profits tax eff
fective as of last January first, in
stead of January first.
Retention of all of the transpOrta-
ton taxes for the calendar year
1922, but at half the present rates
instead of complete repeal as of next
January first.
Repeal of the capital stock tax
effective next year. an entirely new
proposal.
Reduction of the maximum in
come surtax rate from GO per cent
to rs per cent effective January 1,
1922, instead of to 80 per cent as
provided in the House Bill.
An increase of per cent, instead
of 2eper cent in the normal cor
poration income tax, making the
January first.
A manufacturers tax on cosmet-
les and proprietary medicines to re-
place the present stamp taxes which
were eliminated by the House.
Retention next year of the taxes
on insurance premiums, but at one
half the present rates.
With these exceptions, the Treas
ury Secretary was understood to have
approved the House measure with
its provisions for an increase of $500
in the exemption to heads of families
having net incomes of $4,000 a year
or less and 5000 additional for de-
pendents; for decreased rates on
sporting goods, yachts and furs and
for manufacturers taxes on fountain
syrup and other ingredients of soft
drinks and in lieu of the present So
called nuisance taxes.
| Mr.. Mellon was before the commit
tee at two sessions and there was a
general discussion of his recon-
mendations as we'll as of the probable
revenue needs of the Government for
the fiscal year. The Secretary placed
these at $4,O34,OOO,OOO on the basis
of the reduction in expenditures
agreed upon at the White House tax
| conference last August 9th and esti-
mated that $SO0,0OO,0OO of this
total would be raised from non-tax
sources, such as customs, salvage and
the like, leaving $3,234,O0O,OO0 to
come from internal taxes.
This total is $134,00O,O00 less than
the estimated receipts under the
House for this year, the differ
ence being accounted for through re-
peal of the excess profits tax as of
last January 1. 1t was to make up
the loss from the profits tax that Mr..
Mellon proposed an additional 21a
per cent increase in the corporation
income tax, retention of the transpor-
tatlon and insurance premium taxes
and restoration of the taxes on cos
metics and proprietary medicines.
The additional corporation income
tax is estimated by Treasury officials.
to yield approximately $26O,OOO,OOO
year. The Transportation tax would
return $130,000,00O next year at half
the present rates and the insurance
taxes and the levees on cosmetics
apd medicines an additional $25,OOO,-
600.
| Explaining his proposal for a fur
Their reduction of per cent in the
maximum income surtaX rates, Mr..
Mellon was said to have told the
committe that the lower rate even
tually would return a greater yield
to the Government than the so per
cent rate, because additional money
would be diverted to active business
instead of being invested in tax ex-
empt securities.
1t was stated that there was no
discussion of new sources of taxa
tlon and that none was recommended
by Mr.. Mellon who estimated that the
House bill, as amended in accord
with his recommendation would meet
the needs of the Government, pro-
vlded the economies agreed upon at
the White House conference were eff
fected. He was said to have told the
committee that he thought they
would be and committee members
generally were reported as having
agreed with him.
AS to the authorization in the
House bill for the Treasury to issue
$500, 100000, additional in short
term notes, it was said officially that
this had no relation to any antici-
pated deficit and was not wholly
necessary as the Treasury had asked
for it merely with the idea of having
little more margin in funding vic
tory notes and certificates of indebt-
edness into short-term securities.
4