New-York tribune., 1921-11-08
Senate Passes
Tax Bill, 1924;
Bonus Beaten
scor:snues sram pasc one,


bill, took the same nosition.
Senator Walsh, of Massachusetts. as
called the dica Of mee,ng' the bonus
through sales tax.
Senators Hetiin, La Toilette. Reed
and others spoke for the Simmons
amendment Senator Fralinghuysen
opposed it,
The bonus question having been dis
posed Of the Senate proceeded to the
consideration of various amendments.
Senator Walsh, of Massachusetts,
presented an amendment providing for
graduated tax on gifts. 1t was
adopted, 81 to IS. The tax ranges from
l per cent on gifts between $4,000 and
$5o,eQ0 up to 25 per cent on those
above 100000
Senator Walsh held that such tax
was essential iii order to prevent per-
sons of wealth from escaping taxes by
distributing their property among
their relatives.
Sales Tax Proposal Rejected
Senator Smoot, Republican. of Utah.
brought u, the sales tax again to-
night, proposing his original per cent
manufacturers levy with 10 per cent
corporation tax, 80 per cont maxi;
rum income surtax rate and q capital
stock tax. 1t was rejected without
record vote.
Reconsidering its former action the
Senate voted to allow original pur-
chasers of Liberty and Victory bonds
an exemption equal to the interest on
money borrowed 80 purchase or carry
those bonds. The Senate previously
had agreed to allow an exemption only
on the difference between the interest
on the money BORROWED, and the amount
OF interest received from the bonds
On motion of Senator Reed the Sem
Lodge amendments allowing holding
companies to deduct from their capital
stock tax the amount of such tax paid
en- the stock of their subsidiaries.
On motion of Senator Pomerene,
Democrat, Ohio, the Senate voted, "A
TO ID, to make the capital stock tax
on all corporations the same as at
present-$1 on each $1,000 of capital
stock in excess of $4,000.
Another effort to continue the ex-
cess profits tax after this calendar
to 80. an amendment by Senator Reed
proposing tax of 20 per cent on net
profits of corporations in excess of SO
per cent of the invested capital.
In rapid succession the Senate re-
jected three amendments proposing
changes in the corporation income tax
rate of Is per cent previously agreed
upon. The first amendment. by Sena-
tor Edge, Republican, of New Jersey
proposed retention of the present 10
per cent rate; the second by Senator
Walsh, Democrat, of Massachusetts,,
was for graduated tax of 10 to 90
per cent, and the third. by Senator
Lenroot, Republican, of Wisconsin, pro-
posed a 10 per cent rate in the case of
corporations having net profits of per
cent or less.
For second time. and by vote of
81 to %, the Senate rejected the La
Toilette amendment proposing to make
tax returns matter of public record
Seven Republicans joined the Demo-
Gratis in supporting the amendment.
Elective Proposal Rejected
BY vote of 81 to 22 the Senate re-
Jected an amendment by Senator Jones,
Democrat, of New Mexico, proposing
to allow partnerships and individuals
to elect whether they should pay taxes
on the net incomes from their business
at the corporation or individual income
rates.
On tie vote, 80 to 80, the Senate
rejected an amendment by Senator
Kenyon, Republican, of Iowa, proposing
tax equivalent to Is per cent of the
value of tax exempt securities trans
ferred as parts of estates, provided
such securities were issued six months
after the passage Of the act. Previous
ly, by vote of 33 to 25 the Senate
had rejected an amendment by Senator
La Toilette, Republican, of Wisconsin,
whicn would have imposed the same
tax and also 10 per cent tax on the
transfer of tax exempt securities is
sued before the passage of the act
The Senate bill will raise for the
current lscal year, ending July l.,
1922, $3,250,000000. The House bill
would raise substantially the same, or
S3.240, 100000.
The Senate bill for the next fiscal
year, ending July /, 1928. viii raise
$2,725, 100000. On the basis of exist
ing law there would be raised in the
current fiscal year $3,460 100000 and
S3.34O. 100000 next fiscal year. The
Senate BILL therefore, represents a cut
of about 100000, 900, as compared with
existing law, but this will not be felt
until the next fiscal year, when it is
fiscal year would raise $2,26O 900 600.
by the Senate bill the excess profits
tax is repealed as of January /, 1922.
The House bill repeals the excess prof
its tax the same date.
Normal Tax Rate 4 Per Cent
The Senate bill, like the House bill,
leaves the normal income tax rate on
individuals at A per cent up to $4,000
and 8 per cent on the balance, and
fixed the exemption for the head of a
family at $4,000. the same as the House
bill. In both bills the amount of the
exemption for each dependent child is
fixed at $400.
Under the Senate bill the surtax
rates reach a maximum of so per cent
above 100000. Under the House bill
81 per cent above $4,000 is the maxi
mum. The surtax begins at SIS 900 in
the House bill and at $4,000 in the SEN
ate bill.
Transportation taxes are eliminated
as of january l, 1929, under the Senate
bull. The House bill Is similar.
The Senate nxed the corporation in
come tax at is per cent instead Of 10.
as under existing law, effective January
!, 1922: The House figure is 121s per
cent. Under the 15 per cent tax the
revenue yield for the next fiscal wear
will be s670,000.000.
"a Inheritance Kates Increased
The inheritance tax rates arc in
creased ever existing law by the Sem
ate, reaching a maximum Of so per
cent on net inhcritances of 500, ,O0O.-
600. The House did not change the
existing law
premium taxes on domestic life in
surance companies are eliminated by
the Senate bill and most Of the cor
roratlon taxes. The same is true OF