Norwich bulletin., 1921-09-09
Revenue Needs Set
 At S4,O34,OOO,OOO
On Basis of Reduction in Ex- penditures- -Sec'y Mellon Tells Senate Committee.

Washington, Sept. S-Changes in the house tax bill recommended today to the senate finance committee by Secretary Mellon included:
 Repeal of the excess profits tax ef fective as of last Januady first instead of next January first.
 Retention of all the transportation taxes for the calendar year 1922, but at half the present rates instead of com plete repeal as Of next January first.
 Repeal of the capital stock tax, effect i've next year, an entirely new proposal.
 Reduction of the ma ximum income sur tax rate from 63 per cent to 25 per cent effective January 1, 1922 instead of to 32 per cent as provided in the house bill.
 An increase of per cent instead of 2 1-2 per cent in the normal corporaion income tax, making the total 15 per cent retroactive to last January first. A manufacturers tax on cosmetics and proprietary medicines to replace the pres ent stamp taxes which were eliminated by the house
 Retention next year of the taxes on | insurance premiums but at one half the present rates
 1 With these exceptions, the treasury i secretary was understood to have ap- proved the house measure with its pro ] visions for an increase of $500 in the exemption to heads of families having net incomes of s5,0o0 year or less and s200 additional for dependents; for de creased rates on sporting goods yachts
 and furs and for manufacturers taxes
 on fountain syrups and other ingredients of soft drinks in lieu of the present SO called nuisance taxes.
 MT. Mellon was sbefore the committee at two sessions and there was genera discussion of his recommendations as wei
 as of the probable revenue needs of tn government for this fiscal year. Tn secreatry placed these at $4,034, ,0OO ,00'
 on the basis of the reduction in expend itures agreed, upon at the White Hous tax conference last August ninth an'
 estimated that $S00.000,000 of this to
 tai would be raised from non-ta'
 sources. such as customs. salvage an
 the like, leaving S3,234, 100000 to com
 from internal taxes
 This total is s134, 100000 less than tn
 estimated receipts under the house bi
 for this year the difference being ac
 counted for through repeal of the exces
 profits tax as of last January first.
 was to make up the loss from the profit tax that MT. Mellon proposed an addi
 tional two and one half per cent increas
 in the corporation income tax, retentio
 of the transportation and icurance pre-
 mium taxes and restoration of the taXe on cosmetics and proprietary medicines
 The aditional corporation income ta } | is estimated by treasury officials to ylel l approximately $260,00o,000 year Tn } transportation tax would return s130 : 00o, 900 next year at half the preser rates and the incurance taxes and th levies on cosmetics and medicines a additional $25ooo,000.
 5 Explaining his proposal for furthf : reduction of per cent in the maximu1 1 income sur-tax. MT. Mefeon was sai ? to have told the committee that tf lower rate eventually would return greater yield to the government than tf
 32= per cent rate, because additions money would be diverted to active bus
 ness instead of being invested in ta exempt securities
 It was stated that there was no di /. cussion of new sources of taxation al . that none was recommended by MT. Me
 lon who estimated tha1 the house bill y. amended in accord with his recommend I tions would meet the needs of the gover
 ment provided the economies agre l. upon at the White House conference we . effected.
 a As to the authorization in The hou E. bill for the treasury to issue $500,00' e 900 additional in short term notes, it W
 said officially that this had no relati s to any anticipated deficit and was T e wholly necessary, as the treasury h. n asked for it merely with the idea
 having a little more margin in fundi 's victory notes and certificates of indel 1s edness into short term securities.