Evening journal., 1922-12-07
.SURTAX CUT
IS OPPOSED
Secretary MELONS Sugges
ton Meets Strong Objec-
ton in Both Houses
LITTLE CHANCE
TO BECOME LAW

WASHINGTON, Dec. THE rec
ommendation OF Andrew W. Mellon.
Secretary OF the Treasury. for a SO
per cent. cut In surtaxes on higher
incomes made In his annual report
struck a snag when It reached both
houses OF Congress yesterday.
Republican ProgreSsives and Dem
ocrats, who are strong for excess
profits taxes. or at least the reten-
ton OF the present surfaces. have no
sympathy with the Mellon proposal.
There is practically no chance that II
will pass the outposts or Congress
sional plckets.
Senator Arthur Capper. OF Kan
sas. leader OF the farm bloc" in the
Senate, reflected the strong opposi-
ton view. He said:
Speaking for myself. I am abso-
lutely opposed 10 the proposed re-
duction in surfaces advocated by
Secretary Mellon This Is no time to
reduce the surtax on the rich taxpay-
ers. We are running behind on gov
eminent revenues as the situation is
today.
The Treasury Department reports
that the income tax returns fell of
last year and we have got t. go on
TO raise the necessary government
revenues.
'I do not see why the big inter
ests and taxpayers should have their
taxes reduced when IA lot OF farmers
out Ia the West are barely able TO
raise enough money TO pay their
State and county taxes.
Il think Secretary MELONS pro-
posal has hard shedding ahead OF Il
in both Senate and House"
In connection with the suggested
reduction In surtax rates. Secretary
Mellon urged the closing. so far as
possible. OF existing avenues OF es-
cape from Federal taxes. No gem
eral revision OF the revenue laws is
proposed nor are additional taxes
suggested. MT Mellon expressing
the hope OF meeting any Indicated
Government deficit through collec-
ton OF back taxes and income from
other sources.
The Treasury Secretary informs
Congress that 20 attempt TO stop the
gaps through which there Is an
avoidance OF tax payments to the
Governn.ent will not be enough be-
cause the existing rates of surtax
put such heavy pressure on the
larger taxpayers TO reduce their tax
able incomes" that new once would
surely be found. He adds that the
high rates sound productive" but
that the fact remains that they are
becoming increasingly ineffective
and are yielding less and less reve-
nue. each year.
The more important OF the meth
DDS used by the taxpayers 20 re-
duce IN amount OF income subject
to taxation are listed by Mr.. Mellon
as follows:
Deduction OF losses on sales OF
capital assets. with the failure TO
realize on capital gains.
Exchanges OF property and Sc
curities so as TO avoid taxable
gains,
Investment in tax-exempt Sc
curities.
Division Of property, creation
trusts and the like.
To support his argument that
the high surfaces gradually are de
feating their own purpose" he calls
attent on that while net incomes OF
all classes increased from S6,2eS,62O I
In 1916 to s23,735.62s,1S3 IN 1920, |
and the number OF returns from .
i37.O36 in 1916 to 7.25s,944 in 1920, I
the number OF returns OF incomes
over 100000 decreased during the
same periot from 1896 in 1915 to
3s6 in 1920 and the amount OF in
comes over $4,000 from Sss2,sT2.-
,s6 in 1915 20 S24s.s54y5S5 in 1920.
In earnestly urg ng' prompt
adoption Of the proposed Constitu-
.lonal amendment against the fur
her issuance OF tax-exempt securl-
les the Treasury Secretary says
hese securities, now reaching the
market at the rate OF about $1,000
100. 900 annually, form the out
tand. ng avenue" OF escape from
he surtaxes.