, 1921-12-07
REDUCTIONS IN
RATE ASKED BY
u. s. TREASURER
INCOME SURTAx
Report of Secre-
tary Mellon Proposes
Adjustment Of Rate on
Business Profits

~ tOANs Zee. g.
further revision of the tax
laws, with a reduction of the
maximum of income surtax
rates to 20 or 25 per cent and
adjustment of the rates on
business profits and on estates, is SUE.
sested by Secretary Mellon in his first
annual report transmitted today 10
-Snsress.
The treasury secretary also ar
nounces that the treasury.s poiicv
with respect TO deferment OF the al.
diers bonus is unchanged and urges
prompt funding OF tho ten bitli,n. OF
dollars OF foreign lcsns as zone OF tha
GUS, anding needs of the present e,o-
norilc situation
Mr.. Mellon informs th,,
thu maturity within ths next ~
months of s~s.75J.coo 900 OF tho short
dated debt makes II imperatIv. tb,r
the pursue a policy OF the
utmost economy and avoid neS unde,S
tak.nss that would burden the tre,e-
'ry n embarrass Tho funding o, err
atom with respect 10 tho f1oat.-r debt.
wen revision Is the subject upon
Vl'oh h SECRETARY lays the most
s.'ess. he says the changes In the
TAX Jaw voted BY congress last month
give substantial relief to business
ani INDUSTRY. and restore Ia some
measure tho freeicm OF business trans.
ncucns, but our SIXTEEN OF taxation .,ill
7eauires careful and thoughtful con-
h~orrauon. He then proceed, 10 say
that II the loss CT rtvcnue r..,,if,ur
from the reducfiaSs IN surta~ md etb.
or rates ~sugges.si cannot be made up
by rigid economy In cxpendttuy... =,
can be met ''cithcr by placing n tan on
certain specific mtic es, or nv. 4 J,vr
se.tral tss 80 n broad class of articles
or transaetiohtu
I is or vitss- Importance NJ
Mcrcn declares, that aIdustn,c,r n.
mace in our schenis, OF ~taxation u,;,c, =.
~ tho burden win not fat undtiy
either directly or Indirectly. upon any
particular class snd Mt the same finn
viii not seriously interfere wifi, nro.
dhcuve industry and the general pros.
perity.
1t would not seem either ,vfse cr
necessary to change from our pr,..,n.
system of taxation to new and ,lntriaI
plans. By retaining the increasem,nt
tax with reasonable surtax rates.
which In a times ultimately should
not rise above ten per cent. tax nav
ers would still DO required to contrl-
butte in proportion to their ability 10
pay; while by placing a certain amount
OF tax on specific articles. or classcs
OF articles. or transactions, also low
rate. that they could readily be borne
without injury, the increasement tax
could be materially simplified, the tax
law could be more readily administer
cd n at tho same time tho needed
revenues would be raised without the
evil effects now resulting from the
present excessive rates OF taxation"
Mr.. Mellon Informs congress that the
amount OF revenue involved in the
suggested reduction OF rates. sis not
rearly as great as is general sup
posed"
To reduce the surtax rates to a max.
imum OF 20 per cen and graduating
the reduction through all the brac-
kets" he says would mean ar appar-
loss OF about $3.50. o0o. 900 in rev.
enue.
20 per cent maximum rate on IN
SANE basis would invcl,o o rcyenr,
loss Of about 5000. o,5 ou0. Other adj.
tu1,nnepts which shousI be made would
! r.ta.y involve an arro mt ca.,ni 20
that made in the s.rtax rates. II is
loss NJ revenue. however. would not
b. permanent. for tho reduced rate.
woI,i ultimately be productive nf more
thsn higher rates. Ii, TO the increase
i. t'1able transactions.-
Reiterating arguments that the ef-
feet OF high surtax rates is to keep
new capital oat of productive enter
prise. and to prevent normal business
transactions with the result that ma
tural industrial development is retard-
ed, Mr.. Mellon adds:
The idea seems to be prevalent that
in taxing large income. only he per.
son receiving tho income. and who Is
to pay the tax is really concerned.
This is a mistake. For whatever the
government takes. in the way OF tax
out Of any income. which would other
wise be saved and invested, and there
by becomes a part OF the capital and
Of the wealth Of the nation, affects not
SO much the Individual from whom IL
is taken as it dpes the whole people OF
the country, in the direct loss OF pro-
dnctive capital.
After all. the wealthy of the coun-
try. upon which all the activities and
the prosperity Of our people depend. is
Continued on Page 10)