Evening star., 1921-09-08
Recommends Increase of S
Per Cent on Income of Cor
porations as Substitute.
SECRETARY OF TREASURY
ASKS FOR OTHER CHANGES
Wants Income Surtaxes in Excess
of Is Per Cent Eliminated-Ap-
pears Before Senate Committee.

Secretary Mellon of the Treasury
Department, appearing before the
Senate finance committee today,
made number of recommendation
OF amendments to the House tax re-
vision bill. The principal recommen-
dations Of the Secretary were as fol-
lows:
The repeal of the excess profits tax
as Of January l, 1921.
The repeal of the capital stock tax
payable 1922. due July 1. 1922.
In place of these taxes the Secre-
tary recommended an increase of
per cent in the income tax on COR
porations. making the total tax on
corporations Is per cent.
The Secretary also recommended
that the personal income surtax be
limited to 25 per cent instead Of the
80 per cent provided in the House
bill. This would be effective Janu-
ary 1. 1922.
The Secretary also recommended
the retention of the taxes on trans
portatlon, express companies and
pipe lines, and other taxes imposed
which would be repealed under the
House bill. The Secretary recon-
mended. however, that these taxes
should be returned at one-half the
present rate during the year 1922 AND
should be finally repealed January
1928.
he also recommended that the taxes
On cosmetics and proprietary medi-
c:nes. which wouio be repeaied by the
House bill. be returned. but with
proviso that they be levied as man.
ufacturers tax
The Secretary Of the Treasury dis
cussed with the committee at consid-
erable length the estimated expendi-
lures for the fiscal year 1922 and the
need of revenue to meet those expen-
ditures.
He stood on the estimates SUBJ
mitted by him othe ways and means
committee Of the House. The origi-
nal estimates of the expenditures for
the fiscal year 1922 Were $500 600.
600. At conference with the Presi-
dent on August 3. it was determined
to lop off s520.oos.oo0 from these
estimates of expenditures, through
promised savings. leaving a total ex-
penditure Of $les4.0o0,0 600.
retary figures receipts as follows:
From customs receipts and back
taxes, $500, ,000. 600. leaving approx
imately $3.200. 100000 to be raised
from the internal revenue taxes. He
told the committee that with the
changes he proposed in the House
tax bill that measure should be able
to raise something more than the
needed $4,000 100000.
The Secretary said he expected the
promised economy in expenditures to
be carried out by the administration.
The committee adjourned to meet
at o'clock this afternoon to continue
its conference with Secretary Mellon.
After hearing the Secretary the Senate
committee will begin its task of rewrit-
ing the House bill. 1t has been engaged
for ten days in considering each section
and hearing detailed explanation from
DR.. T. S. Adams. Treasury tax expert.
Decisions on the House proposals have
been withheld pending the discussion
with Mr.. Mellon.
Senator Calder of New York today ex-
planned to President Harding his. pro-
posal- for inclusion in the bill of a tax
Calder said he would propose amend
ments to levy a tax of $40 per gallon
on distilled spirits and S. per barrel on
2.75 per cent alcohol beer.
These new taxes. Senator Calder
would raise s175.0O0. 900 and
cradle the finance committee to solve
a hard problem in its revenue-raising
work.
Distilled Spirits withdrawn.
President Harding's advice regard
ing the tax was not sought by Sena-
tor Calder. who merely explained his
plan to the executive before offering
1t formally in the finance committee.
Senator Calder said that 100000
gallons of distilled spirits were with
drawn from bonded warehouses dur
ing the past year, paying the present
industrial alcohol tax OF only S2.20
per gallon.
Ninety per cent of this was used
for beverage purposes and should
have paid the beverage tax which
was paid by consumers" said Sena-
tor Calder.