The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1921-09-15
SENATORS DEFEAT
MELLON TAX PLAN
Finance Committee Vote Down
Three of His Proposals.
STAND BY THE HOUSE BILL
Oppose Retroactive Tax Repeal and
Vote Unanimously for Increased
Income Tax Exemptions for
Heads of Families.

Washington, Sept. 13.-The senate
finance committee voted unanimously
for increased income tax exemptions
for heads Of families and for depend
ents.
The provisions of the house rev.
enue revision bill increasing the per
sonal exemptions from $1,000 to
$500 for heads of families having
incomes of $1,000 or less and the eX-
emptions for children and dependents
from $500 TO $500 each were approved.
All of Secretary of the Treasury
Melons tax recommendations that
came to a vote were rejected by the
committee and the committee expects
to reject the remainder of the admin
istration tax program when it votes
on making the excess profits tax re-
peal retroactive.
Consideration of the rate sched-
ules will be completed by the finance
committee on Friday, Chairman Pen
rose announced, so that the bill can
be drafted and reported to the senate
on September u.
House Bill Stands.
The bill, in its final FORM will be
virtually the same measure that
passed the house. Senator Penrose
predicted that the finance committee
probably will refuse Mr.. Melons re-
quest to make the excess profits tax
retroactive. If this is done, Senator
Penrose' said Mr. MELONS recon-
mendation that S250O00,OO0 in addi-
tlOnal taxes be levied on smaH tax
payers to make up for the loss of the
excess profits tax would not have to
be carried out.
Personally" said Senator PenrOse,
81 would be entirely willing to see the
excess profits tax abolished as of
January l, 1921, but my suspicion is
that the committee will defeat me
The finance committee fixed 80 per
cent as the maximum individual in
come surtax rate This is the same
figure as fixed by the house. Mr..
Mellon had recommended that sur
taxes be reduced to % per cent but
the senate committee rejected his pro
posal without a record vote. The re-
auctions would take effect January
], 1929.
The schedule Of surtaXes will be re-
arranged by the senate committee.
Senator Penrose said the committee
was working on a plan to have the
surtaXes start at l per cent on in
comes of $4,000 instead of $1,000 and
increase the surtax ! per cent for
each additional $4,000 Of income in
stead Of per cent ms at present.
The plan, If adopted, would mean
reduction of surtaXes on incomes
from $4,000 to $4,000. The 80 per
cent tax would be levied on incomes
of $72,0 900 and over
In deciding upon the house figure
for the surtax maximum the senate
committee defeated a motion to re-
duce the normal income tax rate from
4 per cent on incomes of less than
$4,000 and per cent on incomes
above that figure to per cent.
LaFolIette Motion Defeated
Senator LaFOllette made the mo-
ton to reduce the normal income tax
but it was rejected without a record
vote. The senator announced later
that he would propose the reduction
in the senate as an amendment when
the tax bill is considered there
The finance committee also ap-
proved the provision of the house bill
permitting taxpayers to deduct net
losses against their income for the
succeeding year.
In addition to the excess profits
tax repeal the committee will vote on
Secretary Melons recommendation
that one-half the present transpOrta-
ton taxes be retained for another
year and that the existing tax on cap
ital stock be repealed.
Senator Penrose said that the COM
mittee probably will refuse to retain
the transportation taxes and he pre-
dicted also that the corporation tax
of 1914 per cent fixed by the house
bill will be approved by the finance
committee There is no disposition
on the part of the committee to in
crease the tax to 10 per cent as rec
commended by Mr. Mellon, Senator
panrosp said