The Washington herald., 1921-09-10
BATTLELOOMS
OVER MELONS
TAXPROCRAM
Early Repeal of Excess
Profits:lLevy Point
In Dispute.
QUESTION SPLIT
G. o. P. IN HOUSE
Senate Finance Commit
tee Fails to Agree on
Measure.
(United News.)


A bitter fight between the Senate
and House is in prospect should the
Senate follow the recommendations
of Secretary of the Treasury Mellon
on the tax revision bill.
Meanwhile, the Senate Finance
Committee Is struggling to recon-
cile differences among its members
who are at odds over the repeal of
the excess profits taxes and the re-
duction of the surtax rates. These
questions. which split the House
Republicans, are calculated to cause
strife between the two houses.
\ Count on Democratic Aid.
Under the'feadership of Represen-
tative Mann, of Illinois, the Repub-
1ican caucus of the House, by a vote
of So to 81, refused to accede to the
wishes Of the administration to re-
peal the excess profits taxes as of
January l. 1921. The tax bill as
passed by the House provided for
repeal as Of January l. 1929, and
the insurgent leaders assert that
they will insist upon it. With 100
Democrats to aid them, they would
be able to block the passage of the
bill when 1t goes back for confer
ence' If they carried out their
threat.
Mr.. MELONS recommendations that
the maximum srrtax rates be re-
duced to % per cent as Of January
1. 1922, has served to aggravate the
situation. Fifty House Republicans
bolted the party and voted with the
democrats to recommit the tax bill
with instructions to increase surtax
rates. which were set by the House
at 81 per cent. Passage of the
measure by the Senate, with the az
per cent provision, would tend 10
stiffen tha House opposition.
Fail to Reach Decision.
chairman Penrose. of the Senate
FINANCE Committee, announced Vs.
terday that the time fo- action had
arrived Accordingly, Republican
members OF the committee met 10
TX oates for determining the high
points of policy of the tax hill
however, after a spirited two-hour
session. 1t was announced that no
decision had been reached.
some members said that IL had
oeen definitely decided to provide
Tor raising $4,000, 600, 900 revenue
put other members declared that
they did not understand anv sucb
ueclslon was reached. "AnE"endIess
"rangle over the repeal of the
excess profits ensued. according to
several Senators.
Claim Tax IL Collected.
Advocates of the 1922 renea1 q,
sist that the rich corporations o.
ieeteo' expecting to pay the taxes,
iala tnelr business plans accord
insiy and have already collected
tne taxes. A retroactive repeal.
tney say would permit these cor
porations to pocket this money
and that the government would be
virtually throwing away several
hundred million dollars which II
sorely needs.
Inc administration is bringing
pressure to bear to impose its
views of a retroactive repeal of the
profits taxes on Congress. The
people, it is pointed out. expect the
repeal as a redemption of Republi-
can campaign pledges.
Fought by In Toilette.
Senator La Toilette, of wisconI
sln' is leading the fight against the
recommendations In
'he senate committee. Should the
committee accept the provisions,
ne would likely be joined by the
bulk OF Progressives in the Senate.
with almost solid Democratic SUD-
port, passage of the provision
would come by a narrow margin.
Administration leaders say, how
ever, that they have the necessary
votes.
senate Democrats are preparing
Tor q vigorous fight on the repeal
OF the excess profits taxes, reduc-
tion of surtaxes and the continua-
ton OF transportation taxes. Sena-
TOT simmons, of North Carolina
ranking minority member on the
Finance Committee, declared that
reduction of the surtaxes is 'indet
fensibie" and that transportation
taxes have increased freight rates
and resulted in stagnation of traf-
fic."
secretary Mellon appeared before
the committee and suggested that
II mis- previous recommendation
was rejected the committee might
Increase postal rates or impose
new stamp--tax on documents.