The Birmingham age-herald., 1923-12-17
TAX REVISION |PLANREDRAWN BY M [ 1 1 | N
Proposals Are Reduced To Definite Form And For- Warded To House Ways And Means Committee
 SAYS PROGRAM HAS MET WITH PUBLIC APPROVAL Analysis Shows Decrease On Earned Incomes Of $4, ,00O Or Less Will Amount To About Forty-four Per Cent

WASHINGTON, Dec. 16.-Secretary Mellon has reduced to definite form his tax reduction proposals and for warded a complete redraft of the revenue act to the House ways and means committee for use in consider ation of tax to begin Tuesday.
 The treasury secretary in letter accompanying the redrafted measure made public today at the treasury, noted that the reduction program appears to have met with most favorable public reception" and ad- vised acting Chairman Green, of the committee, that treasury officials are prepared to present at any time arguments in support of the proposed revision.
 In an analysis of the changes pro- posed, Mir Mellon placed first the 2o per cent reduction on incomes below s4000 and the additional credit of 25 per cent to be granted on earned in- comes, showing that in the case of earned incomes of 5000 or less the reduction contemplated really amounts to about A per cent.
 Mir. Melons analysis of the changes proposed follows:
 Analysis Of Changes.
 L Earned income. defined as wages salaries and professional fees, is given a credit of 25 per cent of the amount of the tax attributable to the earned income.
 2. The normal tax on the first s4,o00 of net income is fixed at 3 per cent and up on the remainder of the net income at per cent.
 3. The surfax rates begin at l per cent on tsst incomes s4om s1o.o0a to s12000; an additional 1 per cent for each s2,0oo of net income up to for the next s4.000 of net income up to s40.o00; and then 1 per cent addi- tional for each s6,o00 of net income up to total of 25 per cent at $100,000 and over.
 4 Capital assets are defined as property held by the tax payer for profit or investment for more than two years. Upon the sale of capital assets the tax on the gain from the sale is limited to 1215 per cent of the gain. and the amount by which the tax is reduced on account of such a loss is limited to 1211 per cent of the loss.
 Extent Of Reduction.
 5. The taxpayer is permitted to take as a deduction from his gross income in determining his taxable income interest on indebtedness and losses of on-business character only to the extent that the sum of these two items exceeds his wholly tax-exempt interest.
 6. In community property states where the husband and wife have a joint interest in certain property of either acquired after marriage, the income from this property is taxed to the spouse having control of the property.
 7. The principle contained in the 1918 revenue act that liquidating dividends constitute sale of the stock instead of a distribution of earnings has been restored. This puts liquidating dividends within the capital gain section of the act and recognizes the real effort of such dividends.
 8. The section with reference to the reorganization of corporations has been rewritten to eliminate ex- isting uncertainties in the present act and to include other usual forms
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