The daily banner. (Cambridge, Md.) 1897-2008, 1921-05-02
MELLON HAS FOUR
WAYS TO CUT TAXI
Secretary Of Treasury Asks
Congress For Early Action.
.REAOJU5TS INCOME RATE
Wants Increase For Corporations
Yield $5OO,OoO,ooO and Would RI
peal Levy on Excess Profits.

Washington, May -Four SPECIFIC
proposals for revision Of fedora I'd Xes
are offered congress by Secretary Mel
Ion. with Il recommendation for e&riy
action SO the new taxes can be zap
piled for this calendar year They
are:
1.-Repeal of the excess profits tax
and the existing $4,000 income eX9mp-
ton of corporations, the loss of rsVc-
nue. to be made good by a modf hed
tax on corporate profits on a flat adj
ditt0naI income tax on corporations 10
yield an aggregate of between s foo,-
900 0G0 and $500, 100000.
Reimbursement of income TAX
rates 50 no income will pay more Ahan
40 per cent this year and 80 per gent
thereafter with Il view to producing
aggregate revenues substantially eAul-
valenf 10 the estimated receipts from
the income tax under the EXIST
law
3.-Repeal Of the so-called luxury
taxes together with the nuisance
taxes, such as those on soda fountain
drinks. but retention of the transPor-
tation and miscellaneous specific sales
taxes.
4.-Impositi"n of sufficient new @nd
additional taxes of wide appl."ati F'n
such as increased stamp taxes orl H.
cenSp taxes. on the use of AUTOMOBILES.
to bring the total revenues fr0ml m
ternal taxes. after making the changes
above suggested. to approximately 81,
O00.000.000 iii the fiscal years 1922
and 1928. The treasury secretary'S
suggestions are contained in a letter
to Chairman Fordney, of the house
ways and means committee, made pub
lie ut the treasury department. \
copy of it also was transmitted to
Chairman PenroSe of the senate f.
nance committee.
Mellon suggests adoption of admins
trative amendments to the revenue
laws simplifying collections and final
settlements, and permitting under
safeguards, the carrying over of net
losses by taxpayers for one year as
deduction from incomes of succeed
ing years.
THE treasury is not prepared, Mel
Ion says, ito recommend at this time
any general sales tax anG particularly
if the genera sales tax is to super
sede the highly productive specific
sales tax now in effect on many rela-
lively non-essential articles"
Mellon say also he wishes it were
possible to recommend the repeal of
the transpOr alton tax. but adds il
produces annually approximately
$330,000,0O0 and its repeal cannot be
affected with safety unless congress
has an acceptable substitute 10 offer"
The treasury secretary also suggests
it may be "advisable'' for congress to
take action by statute or by constitu-
tional amendment restricting further
issues of tax exempt securities, saying
it is estimated there are now outst1Gd-
fFfgs f7teeff haps $4,000 49994
empt securities, the existence Of which
CONSTITUTES an economic evil of the
first magnitude"
He points out it is now the policy
Of the federal government not to issue
its own obligations free from profits
anu SUI ldAtS, DuI llttI StdlSS dlllf lhu-
inequalities are issuing full tax eX-
empt securities in great volume.
The continued issue of tax exempt
securities, he adds, encourages the
growth of public Indebtedness and
Itends to divert capital from produc-
tive enterprise"
Emphasizing that expenditures for
Of +Io 20
of S5,000,000.0O. Mellon warns con-
gress that the nation cannot continue
to spend at this shocking rate" sub
stantial cuts in current expenditures,
he says, offers the only hope of eff
fective relief from the tax burden.