The Washington times., 1921-09-09
HITCHCOCK WILL
BATTLE MELLON
PLANS ON TAXES
Democratic Leader In Senate ls
Opposed to Proposals OF
Administration.
BY J. BART CAMPBELL.
InternatIanal NeMn Service.

International News service.
Secretary Melons proposed aboli-
ton Of all income surtaxes above %
per cent was attacked by Senator
Hitchcock Of Nebraska, Democratic
leader, upon his return here today.
Hitchcock also condemned the Ad.
ministration proposal for the repeal
of the excess profits tax. which Mel.
lon would make retroactive to jan
uary 1, 1921.
Income Taxes Urged.
Retention of graduated income and
inheritance taxes was urged by Hitch
cock as tending ito return to society
In general the excessive amounts GER
tain favored individuals have received.
and for which they have no real use. !"
There were other Indications that
Melons latest tax revision sugges-
tions are destined for considerable op-
position, not only from Democratic
Senators but from several on the Re-
publican side who do not view with
favor the proposed tightening Of taxa
ton upon large incomes.
The Administration tax plan. as set
forth by Mellon, is expected, however,
TO be adopted by a majority Of the
Senate Finance Committee, led by
Senator Penrose. Republican. Of Penn
sylvania, the committee chairman.
A long and bitter fight is threatened
over the new revenue revision bill
which Penrose and his associates VIII
report to the Senate when II recon
yenes on September 81. They plan to
begin writing the bill today. although
perhaps not before another conference
with Mellon.
''The proposal to do away with the
excess profits tax, and with all sur
taxes over rs per cent on individual
incomes, Is very objectionable,
Hitchcock said. ITO make the pro-
posed repeal of the excess profits tax
retroactive to January /. 1871, adds
to the mistake.
"The surtax Is the extra tar paid
by individuals with large incomes.
The larger the income the higher the
rate Of tax. until under the present
law the rate reaches 81 per cent. Sec
retary Mellon proposes to stop in
creasing the rate - soon a. Il
reaches Is per cent. That n to say.
q man having $4,000 income . year
would pay 26 per cant on everything
above that amount regardless Of
whether the excess was $1,000 or
81, 100000.
IT think the graduation should
continue upward as II does Tow. ut
least until the rate Of tax reaches
81 per cent. Such vast incomes a.
$500. 900. or over. cannot be used as
incomes. They are merely capital
increases. As such, they add enor-
mously each year TO the wealth OF q
few. They are contrary to the pub
lic interests and ought to be con-
sidered contrary to public policy.
They can be limited and restricted by
taxation.
''In my opinion, one great benefit
which has come from high taxes on
incomes has been to arouse 4 great
interest in Government economy by
making people feel the cost Of Gov
ernment. The tar on consumption 10
not felt by the well.to-do. and as long
as the revenues Of our Government
were raised In that way. the we'll
to-do classes were Indifferent to the
gan paying definite income taxes
on their incomes they started the
demand for economy In Government
expenditures.
''The country produces q certain
smount Of wealth each year. The
share Of II which each person receives
In his income. If the very fortunate
get incomes much larger than they
can legttimately spend, they deprive
others Of what they actually need.
This creates an evil. To remedy this,
graduated income taxes and graduated
inheritance taxes are desirable. They
not only distribute the burdens Of
Government I'm proportion to the abil-
ity to pay and in proportion to the
benefits received, but they tend to re-
turn to society in general the exces-
sive amounts certain favored individ-
uals have received and for which they
have no real use."