Evening journal., 1921-11-09
SURTAK SPLIT
WIDENS HOUSE
Republicans Divided on Sen.
ate Plan of so Per Cent.
Maximum Rate
PENROSE EXPLAINS
SENATE BILL

WASHINGTON. Nov. .. The
,reach in the ranks OF House Re
,ubiicans over the acceptance OF the
lenate maximum income surtax rate
II SO per cent. yesterday continued
% widen.
House leaders sought to defer the
light at least until after the re-writ-
ng Of the bin by the conferees gets
ander way but whether negotiations
10 that end. which were opened with
he Insurgents" would be success
'ul is not decided.
N the negotiations started today
terminate without an agreement.
majority leaders plan TO bring in a
rule 10 force the bill to conference
without Instructions TO the man
ayers. In that event. Republican
Insurgents" and the Democrats are
prepared 10 make a fight on the
uie. Losing in that. they say they
'till will be able to renew the fight
when the House managers ask for
Instructions.
House leaders are understood 20
De ready to accept a compromise on
NE surtax rate at an increase of ap-
proxlmately per cent. over the 80
per cent. maximum fixed in the bin
as it passed the House. Majority
leaders in the Senate also look for
ward 10 compromise at around 40
per cent.
Chairman renrose, OF the Senate
Finance Committee. said today he
expected the bill to go 10 the Presi-
ient next week. other Senators and
some Hosse leaders were less op-
timlstic. Estimates as to the time
OF final Congressional action ranged
all the way from ten days to three
weeks
Treasury experts completed their
estimates as to the revenue which
would be yielded by the Senate Bin
The total for this fiscal year was
placed at S3.242.7sO. 900. as com
pared with ss.45O. O00. 900 under the
existing law. that for the next fiscal
year at S2717.2S0. 900, and that for
the calendar year 1928 at S2,726.-
2S0.0o0.
a statement prepared by the ex-
perts and made public by Senator
Penrose said that the technical and
administrative Improvements in tn
bin were ''quite as important as the
reductions in specific taxes"
"Thc improvements in question
work in both directions" the state
ment said. "They close holes
through which taxes fairly due have
hitherto escaped, and they provide
cushions to protect the taxpayer in
situations where profit is not really
made but only appears to be made
Avoidance Of the tax through the
device Of gifts will be greatly re-
duccd.
Necessary business readjustmenti
or reorganizations which are now
blocked by the excessive taxation of
purely paper gains can be carried
through without premature collection
OF the tax. Farmers. miners and
others who realize capital gains.
which in q large majority Of cases
have been accruing through a period
of years. will be permitted to close
their deals and take their profits.
without fear Of a tax as a lump sum.
In one year profits which have been
earned over a series of years.
"rhe compulsory conversion of
property into cash through fire. ship
wreck and the like will no longer
be held to result in taxable gain
when the taxpayer in good faith
Invests the proceeds of the conver.
sion in similar property and goes or
conducting business.
American citizens and domesti
corporations engaged in business ii
American possessions will escap
double taxation and be able TO NEE
foreign competition on equal terms.
"The important amortization de
duction has been limited to claim
made IN returns for the years 191
and 1910 in connection with wa
plant and facilities.
"The law relating to refund
credits and suits for taxes has bee
put upon a fairer basis. In genera
the taxpayer viii have four years /
which TO make claim for refund an
five years in which TO bring suit 70
taxes. The Treasury Department
similarly. will hereafter have onl
four years in which TO change as
sessments and five years in which {
bring suits"