New-York tribune., 1921-09-09
Urges Senate Finance
Committee Practically
TO Rcwrite Measure as 1t
Was Passed by House
Wants Profits Tax
Repeal Retroactive
Increase Of Normal Cor
poration Levy 10 Is e
Also Is Recommended

reVlS on Dill passed by the House, which
would compel rewriting of the meas
ure by ths Senate, were recommended
to the Senate Finance Committee
to-day by Secretary of the Treasury
Mellon. Some of the Secretary's pro-
posals were:
Repeal of the excess profits tax
effective as of last January first, in
stead Of next January first.
Retention of ali of the transporta-
tion taxes for the calendar year 1922.
but at half the present rates instead
of complete repeal as of next Janu-
ary first
Repeal of the capital stock tax,
effective next year, an entirely new
proposal.
Reduction Of the maximum income
surtax rate from 60 per cent to 25
per cont, effective January j., 1922,
instead OF to SO per cent, as pro-
vided in the House bill.
An increase of per cent, instead
OF 212 per cent in the normal cor
poration income tax, making the total
T.,
arX first. first. -, ,,,,., .,.. ..,-
and proprietary medicines to replace
the present stamp taxes which were
eliminated by the House.
Retention next year of the taxes on
insurance premiums, but at one half
the present rates.
Approves Other Features
With these exceptions the Treasury
Secretary was understood to have ap-
proved the House measure with its
provisions for an increase of $500 in
the exemption to heads of families hav-
ing net incomes Of $4,000 year or less
and 5000 additional for dependents; for
decreased rates on sporting goods,
yachts and furs, and for manufacturers
taxes on syrups and other ingredients
of soft drinks in lieu of the present
so-called nuisance taxes.
Mr.. Mellon was before the committee
at two sessions and there was a general
discussion OF his recommendations as
we'll as of the probable revenue needs
of the government for this fiscal year
The Secretary placed these at S4,O34,-
100000 on the basis of the reduction
in expenditures agreed upon at the
White House tax conference last
August 8, and estimated that $500, ,00O,-
900 of this total would be raised from
non-taX sources, such as customs,
salvage and the like, leaving $3,234.-
100000 to come from internal taxes.
This total is $134,0 100000 less than
the estimated receipts under the House
bill for this year, the difference being
accounted for through repeal cf the ex-
cess profits tax of last January 1.
1t was to make up the loss from the
profits tax that MI Mellon proposed an
additional 9 u per cent increase in the
corporation income tax, retention of
the transportation and insurance pre-
MUM taxes and restoration of the taxes
on cosmetics and proprietary medi-
cines.
The additional corporation income
tax is estimated by Treasury officials
to yield approximately $260,O0000O a
year. The transportation tax would re-
turn S130,000,000 next year. at half the
present rates, and the levies on cos
metics and medicines an additional
S25,000,000
Predicts Ultimate Gain
Explaining his proposal for further
reductionof per cent in the maximum
income surtaX rates, Mr.. Mellon was
said to have told the committee that
the lower rate eventually would return
greater yield to the government than
the 80 per cent rate because additional
money would be diverted to active busi-
ness instead of being invested in tax
exempt securities.
1t was stated that there was no dis
cussion of new sources of taxation
and that none was recommended by
Mr.. Mellon, who estimated that the
House bill, as amended in accord with
oy,S dot aat ba
needs of the government. provided the
economies agreed upon at the White
House conference were effected. He
was said to have told the committee
that he thought they would be. and
the committee members generally we're
reported as having agreed with him.
As to the authorization in the House
bill for the Treasury to issue $780,
100000 additional in short-term notes,
it WAS said officially that this had no
relation to any anticipated deficit and
was not wholly necessary, as the Treas
ury had asked for it merely with the
idea of having a little more margin in
funding Victory notes and certificates
of indebtedness into short-term securi-
ties.
The radical alterations in virtually
all the important features of the bill
advocated by the Secretary support
entirely the recently announced de-
termination of Chairman Penrose and
members of the Senate committee to
abandon the House measure and re-
port to the Senate when it reconvenes
this month a new bill.
Hold All-Day Hearing
Tc-lsv's hearing of the Secretary was
an all-day executive session. The COM
lnittee met early in the morning and
continued until mid afternoon. when
it tcoa brief recess for luncheon.
AfterwaYN committeeman and the Sec
retary returned to the committee room
and ie,s.med the hearing until late
this atte. noon.
Senator fenrose announced that the
actual work of framing the new reve-
nue. bill will be taken up tomorrow.
The committee will disregard almost
entirely the House bill and begin at
the bottom TO build up measure which
Will embody complete revision of the
revenue laws without merely amending
old laws.
Until morrow not the slightest hit
of work will have been done in the
way of committee discussion of the
various forms of taxation. Despite
this. Senator Penrose again declared
he intends to have the new measure
ready for the Senate on September 81
THE BALSAMS, Dixville Notch, \. H.,
Offers special Autumn rates.-Advt.