The Washington herald., 1921-09-12
Report to Senate Likely
On September 21,
Says Penrose.
CLOSE CONTEST
IN COMMITTEE
Tie Possible If Vote of
McCumber Goes to
Democrats.

The legislative process which win
determine the Federal tax next year
on this years income will be ad-
vanced another step this week.
The Senate Finance Committee,
having received Secretary of the
Treasury MELONS advice and OBJ
tained such other information as It
needs, will buckle down to the task
OF revising the House tax revision
DILL Chairman Penrose said yes
terday the committee would finish
the Job by the end of the week and
De ready to report the amended
bill to the Senate when Congress
reconvenes on September 81.
Fight Over Melons Plan.
The major contests over features
of the bill in the committee this
week and later in the Senate will
be over the following recommenda-
uons of Secretary Mellon:
l. Repeal of the excess profits
tax as of January 1, 1921, so as to
apply to 1921 profits, instead of
the House provision making the re-
peal effective January 1, 1921
2. Reduction of surtaxes on in
divtdual incomes from the present
maximum of SIS per cent to a max
imum of 25 per cent. compared with
the 80 per cent maximum provided
in the House bill.
3. Retention of the transporta-
tion taxes until January l, 1928, at
half the present rates.
The contest will be close in the
Finance Committee. There are six
teen members of the committee
ten Republicans and six Demo
Gratis. The Democrats are solidly
opposed to Mr.. MELONS recommen-
dation and voting with them will
be Senator La Toilette. Republican.
II La Toilette should be the only
Republican member of the COM
mittee to vote against the admin
istration program IL would be ap-
proved, 3 to Z.
MeCumber Held Uncertain.
The administration leaders, how
ever, are not sure of the vote Of
Senator McCumber of North Dakota
He has displayed an attitude of op-
position to the retroactive repeal of
the excess profits tax and some
other features of Mr.. Melons
recommendations that is occasion
ing Chairman Penrose considerable
concern.
A large section of McCumber's
North Dakota constituency are re-
ported to be strongly opposed TO
the retroactive repeal of the ex-
cess profits tax and the reduction
of surtaxes. Former Senator Gronna
is reputed to be the sponsor of this
sentiment and to be planning to
contest McCumber's reelection next
year.
If McCumber should line up with
Senator La Toilette and the Demo
Gratis, the vote on the Mellon pro-
posals would be a tie and the mo-
tion to amend the House bill. In
the particulars proposed, would fail
in the committee. 1t then would
be necessary to bring forward the
proposed changes on the floor Of
the Senate in motions to amend the
bill reported by the committee
Fight In House Possible.
II the Senate amends the House
hill in the important RESPECTS under
consideration. the fight will be
transferred to the House and TO the
conference committee. The Ways
and Means Committee wrote re-
troactive repeal of the excess profits
tax into the bill. but its calculations
we're upset by the caucus of House
RepubIicans which decreed that the
repeal should not become effective
until January l, 1922. This action
was brought about by the unex-
nected coalition of a considerable
number of conservatives with the
radical Republicans.
The reduction of surtaxes to a
80 per cent maximum was opposed
in the House by fifty Republicans
and II the Senate should put
through Mr.. MELONS recommenda-
tion to lower the maximum to 20
ner cent the Republican opposition
In the House is likely to be IN