The New York herald., 1921-08-16
Decision Means Additional
$3.50, ,0OO,OO Revenue to
That Estimated by
Chairman Fordney.
DEBATE LASTED A HOURS
Tax Already Collected From
Consumers in High Prizes.
Mann Forces Contend
in Pressing Measure.
Special Despatch to THE New YORK Hire
New York Herald Bureau
Washington, u. c., Aug. ~

Special Despatch to THE NEw YORK Hre
New York Herald Bureau
Washington, u. C., Aug. n
Republicans of the House in C; It8s
to-day decided by vote of SO Is
that the repeal of the excess
levy and the reduction of the sur Ags
ON large incomes should be delayed
until January ]. 1922. AS the result
of an agreement reached with Presi-
dent Harding and Treasury officials.
Republican members of the Ways and
Means Committee previously had
voted to make the repeal and the re-
duction retroa active to January /. 1921.
which would have relieved business OF
an estimated tax OF s350,00o 900 during
the present calendar year.
After this defeat of the Admin;stra-
ton programme the Republicans de-
cided to delay the increase of the
fiat corporations income tax from
10 to 15 per cent. until January /.
1922. This was to be a partial sUb-
stitute for the excess profits and ha6
pNIiA AAAaAt itAA AOdlAiNt W ltfSA
A meeting of the Republicans OF taa
Ways and Means Committee follcw.f
in which the corporation tax 10 as
come effective next year was Gu t3
l. H per cent.
Vote Saturday Afternoon.
The caucus decided also to ado
/ a;aI Ia ,,.bf - .a4n +
bill will be taken Saturday at 3 p
After the caucus Chairman Fordncy In
troduced the measure In the House.
The s35o.00o,0O0 more revenue to be
obtained this year as a result of the
caucus action viii place a greater bur
den on business. II reduces the net re
duction In taxes 10 about $3.50, 1000 900
this year, with an increase to nlore than
S60o,0oo,o0o next year. Because OF the
decreased reduction. other cuts may be
made when the bill reaches the floor
The measure now win raise about s3.-
100000. 600. Representative Mann (Ill.)
former Republican leader, led the
movement for delaying the repeal and
reduction Of the taxes On corporations
and wealthy individuals.
Republican leaders admit there Is no
iOPt VI ItNtiNAHE W lIt original Dtdn IN
the House. because the Democrats will
vote almost solidly for the Mann pro-
posal. The argument OF the Mann group
was that corporations already have col
lected the excess profits tax from the
people. through Increased costs. and that
they should not be allowed to pocket IL.
The opposing contention was that the
Republican platform pledged the earliest
possible repeal OF that levy
summary of Changes.
The normal income tax reductions
through increased exemptions for mar
ried persons and dependents are the
only changes which are now retroactive
TO January last. These give increased
exemption of $500 to married persons
and an increased exemption of 1903 for
dependents for normal incomes made
during the present calendar year.
Tax changes not heretofore made
public az revealed by the text OF the
bin may be summarized as follows:
Tho President. Justices OF the
Supreme Court. and all other Federal
Judges are completely exempted 50
far as their official salaries are con-
cerned from the income taxes. THIS
is partly In accordance with a recent
decision OF the Supreme Court tN
the salaries of the Executive and L's
judiciary cannot be diminished
income tax payments duriag tac.r
terms in office.
virtual tax on undjstributed earn.
ings Of corporations was put ir 3D.
bill. The rate Is 20 per cent In aaf+
tion TO other corporation taxes v
the provision that II shall apply 0n
when corporations impound earnirs
with the intent OF enabling their EtNs.
holders TO escape the surtaN on
dends that would otherwise be PAID
All liquor which Is used In any v--
for beverage purposes will pay tax
of $40 n gallon. At present nor-
beverage liquor, much of w~i3' i. 10
claimed Is being turned TO beverage
purposes pays a tax OF only t2,20
gallon. This VIII enable TIL Govern
ment TO collect about three times as
much In taxes from bootleggers when
they are caught
All allotments OF the veterans bu-
reaus 20 ex-soldiers or their depend
ents are tax exempt
The present tax on new Insurance
policies. amounting to eight cents for
each 800, is repealed and the insur-
ance corporations brought under the
corporation income tax.
A provision long sought by the
business interests was put In the
bill IL provides that when tax
payer sustains net loss during one
year that loss may be deducted from
the net income she following year
III as a result of this deduction the
taxpayer still has 2 net loss Y may
be deducted the following year.
4 aat tax Of - per cent Il Inn
posed upon the profits derived from
the sole of capital assets if the tax
payer's net income and capital asset
gain together exceeds 1000. At
present the graduated surtaxes ap-
ply to such gains.
In anticipation of q Supreme Court
decision holding unconstitutional this
present taxes on personal service
corporations the COMMITTEES proviAod