The daily banner. (Cambridge, Md.) 1897-2008, 1922-02-03
MELLON OUTLINES
TAX TOPAY BONUS
Increase in Postage and Tobacco
LeVieS Suggested
s1OO,OOO,OOO ON AUTOS
Secretary of Treasury Says Present
Taxes, as They Are, Already as
Rurdensome as Should Be Borne.

Washington, Feb. 3.-The soldiers
| bonus should be paid out OF specia
taxes. such as increased first and sec
0nd class postage and tobacco leVies
Secretary Mellon declared before the
house ways and means conIntttee.
Secretary Mellon reiterated his be
, lief that it would be impracticaDle tt
depend on the foreign debt fur tinanc
| ing the proposed five way adjusted
! compensation plan because she reve
nue from that source is probematirhl
These estimates of revenue from
special sources were made BY the sec
| retary:
one cent increase in first class post
age. $10.0OO,O00
Increa Sed second class postage IL
wipe our deficits i'll that hraiH:h of the
pustotfic,n department, S30,Oeu,0m
Increased cigarette tax. the increase
amounting to fifty cents on 1000. 80
H0.0CN
Increased tobacco Tax, twq cents a
! pound, $5.O00000.
Increased documentary stamp taxes.
<.OU0OG0O.
y tax of two cents on each ha''k
,icck. S:0O0O,GGa
y license ta of fifty cent? Il horse
nnwer on automobiles. $1oo,0r0,WO.
The total estimated return from
nrs, taxes was $500 900, ,00l
Mi Mellon said line bonhs would
'nst S425.OO0,0tp Il year f'ae the tirs
tA.u years. and ;u:;i ;he committee ''.:i
/ could extend Tie LIST OF taNa:.I.
sources 10 make up the deficiency. Il.
made il clear That he as not recon
n"nding' any CT the t"Xes suggested.
The treasury secretary opposed ii
general sales tax Oh the ground of the
81 ard difficulty of administration.
Il should say that we caDnot in
crease the taxes already in existence.
said Mr.. Mellon, ";is they already ar
as burdensom2 as should be borne. Nt
should go further and find some hr;,ati
class of commodity on Which, reason
able taxes would not be tgp great :.
burden.
Il think that the use OF ale foreign
debt for this purpose wotad be ilp
practicable. The foreignsseb is Il
49,. cartA in nfnnnsssi sioz 4slll.&sS -.
dertake to use II for this purpose
would lead to a great many difficult
Ties. 1t is problematIcal whether
funds can be obtained in time TO meet
the bonus.
1T would be much better for US to
provide the funds and collect the for
eign debt as far as possible than to
pledge that source for something when
We don't know what the source will
yield.
Anyhow, this would be cumber-
some way of raising money for the
bonus and in some respects would
cost US more than the other way, for
we undertook to sell the foreign Sc
curities they Ould not bring as much
in the market as our own securities.
In other word they could not be sold
at par"
Questioned by Representative Frear,
Republican, Wisconsin, as to the basi,,
for the estimate Of cost of $3.50 600
| 900 for the bonus. the first two years,
Mr.. Mellon said this was on the as.
sumption that half of the former serv-
| ice men would take cash.
Its all speculative" said Mr. Mel
Ion. mo one can tell accurately how
| much it will cost"
Mr.. Mellon thought that the normal
income rate could be increased tempo
rarily so as to provide $150,OO0,O00 a
year, but he said there was the gen
| eral objection that the rates would be
excessive. He added that the country
of course would be obliged to accept
it If congress so decided, but that 1t
| would be an onerous tax
Objection was made by the secre-
| tary to a per cent tax ON undistr;but-
ed income of corporations, saying this
would have the effect of retartling the
revival of business and consequently
| was undesirable.