The Birmingham age-herald., 1921-05-02
FOUR SPECIFIC TAX. REVISION PROPOSALS. MADE BY MELLON
Recommends Early Action on Part of Congress So New Taxes Can Be Applied for
 This Calendar Year
By Associated Press

Washington, May Flour propo- sals for revision of the federal taxes are made to Congress by Secretary Mellon, with recommendation for early action so the new taxes can be applied for this calendar year. They are:
 Repeal of the excess profits tax and the existing $2000 income ex emption of corporations. the loss of revenue to be made good by a mod flied tax on corporate profits or a flat additional income tax on cor poratons, to yield an aggregate of between S400, 900 and s500,00O.- 900.
 Establishment of income tax rates so that no income will pay more than 40 per cent this year and s5 per cent thereafter, with view to producing aggregate revenues substantially equivalent to the es- timated receipts from the income tax under the existing law.
 Repeal of the so-called luxury taxes, together with the nuisance" taxes, such as those on soda foun- tain drinks, but retention of the
 
 taxes.
 Imposition of sufficient new and additional taxes of wide applica- tion," such as increased stamp tax or licenses tax on the use of auto mobile, to bring the total revenues from internal tax after making the changes above suggested to about
 S4,000 000,000 in the fiscal years 1922 to 1928
 The treasury secretary's sugg gestions are contained in a letter to Chairman Fordney of the House ways and means committee, which was made public to- day at the treasury department. A copy of it also was transmitted to Chairman Penrose of the Senate finance committee.
 SUGGESTS AMENDMENTS
 Mr. Mellon suggests adoption of ad- ministratiye amendments to the revenue laws. simplifying collection and final settlements and permitting, under safe guards, the carrying over of net losses by taxplayers for one, year as a deduc- ton from incomes of succeeding years.
 The treasury is not prepared" MT. Mellon says, ito recommend at this time any general sales tax, and partic- ularly if the general sales tax is to su persede the highly productive specific sales tax now in effect on many rela- lively non essential articles.'
 Mir. Mellon says also that he wishes 1t We're possible to recommend the repeal of he transportation tax, but adds that it produces annually around s38o,000.000, and it's repeal cannot be effected with safety unless Congress has an acceptable substitute to offer
 SCORES TAX EXEMPTS"
 The Secretary of the Treasury also suggests to Congress that it may be "advisablen to take action by statute or by constitutional amendment to re- strict further issues of tax exempt se- curities. saying it is estimated that there are now outstanding perhaps S10.000,000,000 of tax exempt securities the existence of which constitutes an economic evil of the first magnitude He points out that it is now the policy of the federal government not to issue its own obligations free from profits and surtaxes, but that states and mu- nicipalities are issuing full tax exempt . securities in great volume. The con- tinued issue of tax exempt securities, he adds, 'encourage the growth of pub He Indebtedness and tends to divert capital from productive enterprise.
 Emphasizing that expenditures for
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