The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1921-07-28
OUTLINES POLICY
ON TAX REVISION
Administrations Recommended
tons Indicated by Sec. Mellon.
TELLS HOW WEALTHY CHEAT
Believes Present High Surtaxes on
Great incomes Should Be Done
Away With--May Put Back
Three-Cent Postage.

Washington, July 2G,-What the adj
miniStratlon's tax revision recommen-
datiOns to congress will be was indi-
Gated by Secretary of the Treasury
Mellon
Discussing the program he will urge
upon the house ways and means com
mittee, with which he now is confer
ring Secretary Mellon revealed the
treasury attitude with respect to a
number of important tax questions.
1t is probable that the wartime Scent
first class postage rate will be brought
back, he indicated, This question,
however will not be decided until Sec
rotary Mellon has conferred with Post
master General Hays.
In place Of the excess profits tax
which is to be repealed, there will be
substituted fiat corporations tax at
higher rates than existed heretofore
probably 10 per cent,
May Repeal Surtaxes.
Secretary Mellon also hopes that
the present high surtaXes on great in
comes will be done away with, Such
rates, he asserted, forcibly result in
lowering, rather than increasing, gov
eminent revenues and have stagnat-
ing effect on business.
Secretary Mellon said it was i'm
probable that the poposed sales tax
would be written into the revenue bill
at this time. While making it plain
that he was in no way anticipating ac-
tion by the ways and means commit
tee on his recommendations Secretary
Mellon explained that present condi-
tons would make il very difficult to
levy a sales tax.
In his opposition to the surtaNes on
large incomes Secretary Mellon aban-
doned his customary reticence in dis
cussing matters of policy and tiayed
the present law vigorously.
Devised to insure that large for
tunes contribute their proportionate
share to tax levies, such surtaNes
have exactly the opposite effect in
practice, he declared
Many wealthy men are dividing
their fortunes among their families
and thus avoiding legally the higher
surtaN rates, he said. They also are
adopting such schemes as borrowing
large sums Of money, investing the
principal in taN-free securities the
returns of which cannot be touched
by the government and then deducting
the interest paid on the money bor-
rowed from their normal incomes,
which in many instances brings the
latter down below the surtaX levels,
How the Rich Cheat.
Another form of evidence which is
costing the government millions of
revenue, he said. is the tendency of
wealthy men to postpone sales OF
property or securities which have in
creased in value. If sold the gains
are regarded by the law as income
and are taxable.
High tax rates on large incomes
have the effect of discourasing sales
of property. Secretary Mellon said,
and as a result impress a stagnating
I tendency on business, while also de-
! priving the government of much need
ed revenues. Lower rates would in
the long run bring in higher tax re-
turns, he asserted.
Secretary Mellon said he had made
considerable progress in reading the
correspondence bearing on the foreign
loans and expected TO resume his
testimony before the senate finance
committee in a day Of So There will
be no parleys with foreign representa-
tives until the desired legislation is
enacted he added
The secretary also indicated he will
oppose the inclusion of a stamp tax
on bank checks in the revenue bill.