The New York herald., 1921-08-11
FEDERAL TAXATION
CUT $555,OO0,OOO
BY HOUSE LEADERS
Total Slash Will Be $780,
100000, Transportation
Tax Except on Express
to Be Repealed
EFFECTIVE JANUARY |
Exemption of $400 for Each
Child or Dependent and
Reduction of SurtaXes
to Be Retroactive.
BILL READY ON SATURDAY
Programme Goes Beyond Revi-
sions Fixed i'm Conference
With Harding-Nuisance
Levies Eliminated.
BILL READY ON SATURDAY

Special Despatch to THE New York HERALD
New York Herald Bureau,
Washington, ID. c., Aug. 10.
Republican members of the Fous
Ways and Means Committee in agree
ing to-day to changes in Feueral rev
enue laws that will cause a net ta'
reduction OF $555, 900, 900 in the curren
fiscal year, went beyond the revision
fixed In conference last night witt
President Harding.
Additional changes will be made to
morrow and Friday which are expected
to push the total reduction up to 5000.
100000. The progress to-day indicate
the bill will be completed Saturday
Reductions and Changes.
The reductions and changes mad
to-day affect rich and poor, corpora
tions and individuals. AS summaries
In a formal statement they were:
Complete repeal Of transportation
taxes with ths exception of the
/. 1922.
Reduction of the normal income
tax on heads OF families by increas-
Ing the exemption of $500 for each
) child or dependent to Ao0 retroactive
to January /, 1921.
Repeal OF the excess profits tax,
retroactive to January !, 1921.
Reduction Of the surtaxes TO
maximum of 50 per cent. instead of
65, as at present. retroactive to Jam
uary l. 1921.
lncreasa of the flat corporation in
come tax from 10 10 10 per cent,
retroactive 70 January 1. 1921. to
make up for the excess profits and
surtax loss. Efforts to repeal the
1900 exemption for this tax vera
defeated.
Exemption In income returns OF the
first $500 received as interest or divi-
dends from investments in building
and loan associations. At an aver
ags yield Of 5 per cent. on such in
vestment. $4,000 OF such securities
held by one individual or corpora
tlon would thus be tax exempt.
Repeal of the luxury taxes on
wearing apparel.
Repeal Of the present stamp taxes
on proprietary medicines. perfumes
and toilet articles, effective January
l. 1922, and the substitution OF
per cent. levy on these articles. to be
paid by the manufacturer.
Repeal of ice cream soda and
bottled beverage soda water taxes,
effective January /, 1922 Theee
taxes are now paid over the counter
by the consumer. For these levies
will be substituted taxes OF 15 cents
gallon on near beer and other
cereal beverages instead of is per
cent at present; cents q gallon on
concentrated fruit juices and syrups
instead Of the present tax of 10 per
cent; 10 cents a gallon on finished
fountain syrupo; 5 cents a pound on
carbonic acid gas: 3 cents a gallon
on a class of grape Juice to which
water is not added and 2 cents on
grape Juice to which water Is added.
Nuisnnces Taxes EIimjD ted.
The committee eliminated all tn
nuisance" taxes. and where substitu
tions are made the new levies will b
paid by the manufacturer instead o
across the counter in the form OF stamp
or extra pennies.
The complete repeal Of the transporta
tion taxes came as a surprise, 1t beinl
virtually decided at the conference witt
the President yesterday that because O
the great need for revenue fifty pc
cent, reduction. with repeal in 1923, wa
the best that could be offered Th
committee believed. however. the de
mand for such repeal was so grea
that step would be practicable wit
the reductions In Government expendi
lures that will be made. The taxes ar
8 per cent on passenger and Pullman
fares and 3 per cent. on freight.
Representative Bacharach IN. J) lie
fight for a reduction OF the norma
income tax rates. He first proposed tina
the present exemptions Of $1,000 for un
married persons and $4,000 for mar
ried be increased $500. This was at firs
adopted. but later the committee decides
that II would be wiser to increase onl.
the exemption for children and de
pendents.
Efforts probably will be made in III
House to decrease the normal income Ia
rate from to per cent, Democrat
leading in the move A move will b
nade tomorrow TO repeal the capits
stocl tax.
According to estimates of Represer
.ativc Longworth (Ohio) the taxes rs
ueaied or reduced to-day will mean
'oss OF about sts9.0oo. 900 In revenue
rhe increases and substltutions wi
trlng in rcvcnd, Ct 1894 90. 600. maxim
the net reduction OF 1856, ,ooo, 900.
The losses foliow: Excess profit
sI50.uo0,o00; deduction OF surtaxe,
500, 100000; freight taxes. sf45.ooo 900
passenger. s't0.000.000; Pullman
$4,000. 900; luxury taxes. $4,000, 900
roda water and ice cream. s25, 600. 900
proprietary medicines and toilet articles
$4,000. 900; increased exemption for dc
pendents, $50. 100000
The gains are: Corporation incom
tax increase, s.G3.ooo,000 bevcrag.
syrup and fruit fiice. s63. 600, 600 5 pc
cent. levy on medicines and toile
erticles. sS,000.000.
Representative Garner tTexas), th
ranking Democrat on the Ways an
Means Committee. issued a statemen