The New York herald., 1921-08-09
LUXURY TAX REPEAL
FOR 1922 APPROVED
WITHOUT OPPOSITION
Ways and Means Committee
Also Decides on Appeal to
President for Reduced
Expenditures.
SMOOT OFFERS PLAN
Would Amend Constitution
to Permit Taxation of
State and City Bonds to
Yield 500, 100000.
SLASH AT ESTIMATES
Republican House Leaders
Plan to Cut Down Melons
Figures By at Least
S559,0OO,OOO.
SLASH AT ESTIMATES


New York Herald Burean,
Washington, ID. c., Aug. q.
Repeal of the ice cream. soda water.
sporting goods and the so-called lux.
ury taxes, effective January 1. 1922.
was approved to-day by Republican
members Of the House Ways and
Means Committee, with assurances
that nearly all these changes will not
be opposed by the Democrats.
At the same time 1t was decided
to appeal to President Harding to
force greater reductions in the esti.
mates in the expenditures OF the Gov.
ernment. A conference will be asked
upon his return tomorrow. at which
the Presidents views on the entire
problem will be sought.
On the Senate side to-day Senator
Smoot (Utah) proposed an amend
ment to the Constitution which would
enable the collection OF taxes on In.
comes derived from tax free securi.
ties, such as State and municipal
bonds. He estimated that the Gov
ernment Is losing annually nearly
S700.000.000 in revenue because OF the
enormous investments Of the people
in such scurities.
Deep Cut I'm MELONS Figures.
The Republican House leaders have
framed a programme of reduction by
which Secretary Melons estimate OF
s4,550.ooo.ooo can be cut s55s,ooo.-
900. They hope to increase the reduc-
ton to $1,000. 600. 900. and II this can
be done they say it Is certain that
taxes can be reduced and only an in
creased levy OF s per cent. in the cor
poration income tax substituted. The
Presidents view will be sought as to
whether he favors postponing repeal
or all taxes until January next, and
he will be informed that the majority
of the committee favors such action.
The saving which House leaders be-
lieve practicable follows: Shipping
Board, 100000. 900; Railroad Admin
istration. s245.0oO,ooo: Army and
Navy. s134, 900. 900 and 500. 900. 600.
through a refunding OF war savings
stamps which fall due the first part
OF next year and which Secretary Mel
lon counted on redeeming without is.u-
ance Of additional securities. These
reductions will cut total expenditures
down to s3,s7e. 900. 900, and ways are
being sought 10 cut the postal deficit
OF $40. 100000. which It is estimated
will accrue.
Aims Mt Local Securities.
Senator Smoot's amendment. affecting
tax free securities. reads
Congress shall have power to lav
and collect taxes on incomes derived
from obligations issued or created by
State or any political subdivision there
OF. after ratification OF this article, with
o,r apportionment among the several
States and without regard to any CEN
sus or enumeration"
THE enactment OF some such provi-
sion is absolutely necessary" Senator
Smoot told THE NEW YoRR HERALD to-
day. ~ the Government IL 10 collect
any material amount OF taxes In the
future from persons OF large incomes
The purchase Of these State and other
securities which are exempt from Fed
ernl taxes by the wealthy OF the coun.
try has bcen practiccd 10 such an eX-
tent already that the Governments reve-
nues from annual incomes above $780,
600 Is almost disappearing.
MY information II that the taxes
from this source have fallen from ssl7.-
900. 900 a year 10 an estimated amount
OF less than t2oo.oo0.ooo for the year
1870
Il am quite sure that when men OF
smaller means. the lnboring men. the
Of the country. understand the situation
there will be n hearty support for this
proposed amendment"
The action OF the Republicans In the
House committee to-day eliminates the
champion nuisance taxes Tho total
loss Of revenue from these proposed
changes would be slightly less than
$50 600 600.
Los. From Nuisance Taxes.
Tho icviea on ice cream and soda water,
which are now i 0 per cent and now yield
$4,000. 900 a year but Il is estimated
tho loss for repeating them for the last
hair OF the present fiscal year would bs
$4,000. 600. due 20 tho fact that this
business falls OF slightly during the
period from January 70 June.
The repeal OF the taxes on sporting
goods and luxury wearing apparel will
mean loss of about $4,000, 600 during
the current fiscal year II IS estimated.
The luxury taxes repealed are levied on
the following
House or smoking coats. or Jackets
md bath o. lounsing robes in excess of
$3.50.
Mons waistcoats sold independent Of
suits on the amount in excess Of SIS
Womens and missos' hats. bonnsts