The Ocala evening star. [volume] (Ocala, Fla.) 1895-1943, 1921-12-07
REPORT OF SECRETARY
OF THE TREASURY.
fAssociated Press1


Washington, Dec Further revis-
ion Of the tax laws, with reduction
Of the maximum increase in surtax
rates to 20 or 25 per cent and adj.
justment of the rates on business
profits and estates. -is suggested by
Secretary Mellon in his first annual
report, transmitted today to Com
gress
The treasury secretary also an
nOunees that the treasury's policy
with respect to deferment of the sol
dierss bonus is unchanged, and urges
prompt funding Of the ten billions of
dollars Of foreign loans as zone of the
outstanding needs OF the present eco
nomic situation"
sIr. Mellon also informs Congress
that the maturity within the next six
months of $675 100000 of the short
dated debt makes it imperative that
the government pursue policy of the
utmost economicy and avoid new un-
dertakings that would throw addi-
tional burdens on the treasury and
embarrass the funding operations"
with respect to the floating debt.
Revenue revision is the subject
upon which the secretary lays the
most stress. He says the changes in
the tax law voted by Congress last
month Agave substantial relief to
business and industry, and restored
In some measure thfl freedom of busi-
ness transactions, bit our system OF
taxation still requires careful and
thoughtful consideration. He then
proceeds to say that if the loss Of
revenue resulting from the reductions
Ia aurtax and other rates suggested
cannot.be made up by "rigid economy
in expenditures, it can be met
aeither by placing tax on certain
specific articles. or by a low rate gem
eral tax on broad class of articles
or transactions"
..It is of vital importance" Mr.. Mel
lon declares, that adjustment be
made in our scheme of taxation where
by the burden will not fall unduly,
either directly or indirectly, upon any
particular class, and at the same time
will not seriously interference with
productive industry and the general
prosperity of the country.
4It would not seem either wise or
necessary to change from our present
system of taxation to new and untried
plans. BY retaining the income tax
with reasonable surtax rates, which
in peace times ultimately should not
raise above ten per cent, taxpayers
would still be required to contribute
in proportion to their ability to pay;
while by placing certain amount of
tax on specific articles, or classes of
articles, or transactions, so low
rats that they could readily be borne
without injury. the income tax could
be materially simplifed, the tax laws
Ncpuld he more readily administered
and at the same time the needed reVe-
nues would be raised without the evil
effects now resulting from the pres
emf excessive rates of taxation.s
Mr.. Mellon informs Congress that
the amount of revenue involved in the
suggested reduction of rates "is not
nearly as great as is generally sup
posed"
sFp reduce the surtax rates to 9
maximum of Is per Gent and gradual
ing the reductions through ali tbs
BRACKETS" ne says, '4Would mean AZ
apparent loss Of about s130, 100000 ir
revenue. A 20 per cent maximum
rate on the same basis would involve
q revenue loss Of about s200, 1000, 900
Other adjustments which should ht
made would probably involve al
amount equal TO that made in the sur
tax rates. The loss of revenue, how,
ever, would not be permanent, for the
reduced rates would ultimately b
productive of more revenue thar
higher rates, due to the increase II
taxable transactions"
Reiterating arguments that the eff
feet of high surtax rates is to keel
new capital out of productive enter
price, and to prevent normal bushes
transactions with the result that nat
ural industrial development is re
tarded, Mr.. Mellon adds:
aThe idea seems to be preyalen
chat in taxing large incomes, only th
person receiving the income, and VIII
il to pay the tax is really concerned
This is a mistake. For whatever th