Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-08-17
THIS YEARS $32 TAX BILL
WILL BE $4 NEXT YEAR
The Reduction viii Come About Be-
cause Of Changes in the Revenue
Law to Benefit the Man Of
Moderate Means

YT7lIE new tax bill. which the House will
l. begin to debate today and will send to
the Senate on Saturday, contains provisions
for relief which will benefit large part
of tho population.
II does not do all the things agreed upon
by the House leaders who conferred with
the President last week. 1t does not 60 so
far in some respects and it goes farther in
others.
The provision upon which there seems
to be unanimous agreement among the
leaders 0f tho party in power increases the
tax exempt income of men receiving less
than 5000 to $500 for married men and
to $500 for every dependent child regard
less of the amount of the income. The
present exemption is $1,000 and 5000. This
will benefit nine tcnths If not forty -ninc
flticthS Of the income taxpayers. 1t will
exempt entirely from income tax about ono
half Of thuS" who are now paying it.
Th" exemption is to datc from January
|. 1921. so that ii will apply to the incomes
received this year. As the tax that is being
paid now is on last years income, the
change will not affect any payments to be
made before January |, but it will reduce
considerably the tax liability next year.
For example, man with wife and one
child and an income of $4,000 will be
taxable on 500. whereas he is now taxable
on $500. His tax this yCar Is S32. Next
year it will be 81. This is the kind of tax
relief that will be appreciated.
According to the agreement last week the
transportation taxes were TO b. reduced
30 per cent on January /. lO22, and to be
repealed altogether on January |, lo23.
Tho bill aS agreed upon and reported re-
pcNs all transportation taxes on January |.
1922. This includes taxes on railroad
tickets and tickets for seats in parlOr cars
and bcrths in sleeping cars.
1t will reduce all travelling expenses by
s per cent, including the cost of commuta-
ton tickets. and will thus directly benefit
the hundreds Of thousands of business men
who live in the suburbs Of the large cities
and travel to and fro every day.
The bill also takes the tax collector
hand from the purse Of the consumer of
soft drinks and ice cream at the soda water
counter and from the purse of the purchaser
of medicines. perfumes and toilet prepara-
tions And it will no longer be necessary
for the wcarer of eye glasses to pay tax
every time he gets n new pair
The repeal of the excess profits tax to
date from last January. agreed upon at
the White House conference. was strenu-
ously opposed in the Republican caucus.
III was announced tnhl lleTc "cl' loo lN'-
pubicans who would join with the Demo
Gratis in opposing it if the repeal was put
in the bill.
1t was argued that the manufacturers
have been charging this tax to their Gus
toners and will continue to charge 1t until
the bill is passed. AS it Is not expected that
final action will be taken until December
retroactive repeal of the tax would leave
the sums collected in anticipation of its
payment still in the hands of the manu-
facturers.
The soundncss of this argument is open
to question. 1t would be difficult to find
many business men who are mpking nor
nal profits this year, and the man whose
profits are so large that they would be
taxable under the excess profits provision
of the law is n curiosity. Yet the official
estimate Of tho return under the tax is
$50 600. 600.
The reasons for postponing the repeal
until next January are clearly political.
They are put forth chiefly by the repre-
scntativcs from the farming districts, whore
the doctrine that the rich must be made
to pay the cost of government to the full
extent Of their ability is popular.
These amateur economists, however. We're
not strong enough to prevent making the
repeal Of the heavy surtaXcs on incomes
above $4,000 retroactive to January i,
1921 This tax is fixed at 81 per cent,
which is large enough in all reason. 1t will
Weld considerable revenue without forcing
men who have had TO pay I3 per cent Of
their incomes to the Government to seek
tax free investment in order TO protect
their necessary business reserves.
What the bill will look like when the
Senate gcts through with it no one can
forctcl. but it is not likely that the Senate
vii! be- 50 foolish as to forget that the
Nation is expecting some such relief as it
provides for There are certain to b" changes
in some Of its details. There ought to be
no change in its general purposes.
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