The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-05-04
Secretary Mellon
Talks About Taxes
Makes Four Specific Proposals
to House Committee-Must
Cut Down Expenses

Washington. May -Four specific i
proposals for revision Of the federal
taxes are made TO congress by Secre-
tary Mellon, with Il recommendation
for early action so the new taxes can
be applied for this calendar year.
They are:
Repeal of the excess profits tax and
the existing $1,000 income exemption
of corporations. the loss Of revenue
TO be made good by modified tax or
corporate profits or a fiat additional
income tax on corporations, to yield
an aggregate Of between $500, 100000
and $500, 1000, 900.
Readjustment OF income tax. rates
so that no il. come will pay more than
80 per cent t.lis year and 50 per cent
thereafter. with v:ew Of producing
aggregate !..venues substantially
equicalc.l 70 the estimated receipts
from the income tax under the exist
ing law.
Repeal Of the so-called luxury taxes
together with the nuisance" taxes
such. as those on soda fountain drinks,
but retention Of the transportation
and miscellaneous specific sales taxes
Imposition of sufficient new and ad-
ditional taxes Of wide application.
such as increased stamp taxes Or Ii
cense taxes on the use OF automoDlles
20 bring the total revenue from in
ternal taxes after making the changes
above suggested to about S4,000,0O0,
900 in the fiscal years 1922 and 1923.
The treasury secretary's suggestions
are contained in a letter to Chairman
Fordney, Of the house ways and means
committee, which was made public to-
day at the treasury department. .
! copy Of it also was transmitted 10
Chairman Penrose, Of the senate fl
! nance committee.
Mr.. Mellon suggests adoption of ad-
ninistrative amendments TO the rev
enue laws simplifying collections and
final settlements and permitting under
safeguard. the carrying over Of net
F; losses by taxpayers for cr.e year as
deduction from incomes Of succeeding
years.
The treasury is not prepared Mr..
Mellon said. TO recommend at this
/ time any general sales tax and par
ticularly ii the general sales tax is
TO supersede the highly productive
specific sales tax now in effect on
many relatively non n-essentiai ar
tic,es.''
Mr. Mellon says also that he wishes
+ it We're possible to recommend the re-
peal OF the transportation tax. but
adds that it produces annually around
$3.50, 900 and its repeal cannot be
effected with safety unless congress
has an acceptable substitute 20 offer"
The secretary Of the treasury also
suggests to congress that it may be
advisable" to take action by statute
j Or by constitutional amendment TO re-
strict further issues OF tax exempt
securities.
Emphasizing that expenditures for
/! this fiscal year have been at the rate
! OF $1,000 900 600, Mr.. Mellon warns
congress that the nation can not con-
,inue to spend at this shocking rate.
Substantial cuts in current eXpen,ii-
! lures he says, offer only hope Of
! effective relief from the tax burden.
! The last congress he goes on to
say. made a creditabc record in re-
Gucing appropriations and it affected
substantial economies. Notwithstand-
j ing the reduced appropriations: now
ever. expenditures have continued un-
cxpected!y high and the reduction in
( expenditures has barely kept pace
! with the shrinkage in receipts.
/ Mr. Mllon says that estimates for
the fiscal year 1922 are subject to
great uncertainty as to both receipts
and expenditures. The estimated col
/ lections OF $3.700. 100000 of internal
taxes are based on the provisions OF
existing law, he adds, and are $780,
600. SOC less than the estimated col
lec,ions for 1921. chiefly because OF
:ha sllrinkase in business.
The estimate Of about S34o, 100000
for payment to the railroads in 1922
is made necessary by the provisions
OF the Transportation Act and in
creased estimates from the director
general Of railroads. In absence Of
; drastic cuts in military and naval eX-
penditurcS there is almost no pros
pcct. according to the estimates, OF
any substantial available surplus even
in the fiscal year Of 1922