Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-04-15
PRESIDENT LIKELY
TO URGE TAX CUT
Believed Next Congress Viii
Be Asked to Reduce Pres
ent Income Levy.
Mr.. MELLON BUSY ON PLAN
First Step Expected to Involve Re.
lief for 5000, 900 Tax
payers.
Mr.. MELLON BUSY ON PLAN
BY HARDEN COLFAx,

President Harding probably viii
ask Congress at it's next session tc
reduce the income tax. Last week.
disclosure that the Treasury will re.
ceive this year 100000, 900 in income
taxes more than had been expected
mas placed the subject before him ir
a decidedly different light from what
II stood in when every dollar avail.
able was spent before it came into
the tax collectors hands.
To assist the President and his adj.
vlsers In their study of the jncoms
TAX situation, with a view to lower
ing the annual levy il possible. Sec
rotary Mellon plans the early creation
or a tax revision board. to be com
posed Of six members. three of whom
snail be employees of the Treasury
department and three specialists not
IN the government service Mr. Mel
Ions plans already have got to the
point where he is almost ready To ar
nounce the selection of the Treasury's
representatives on the board
TWO of the three men under COZ
! sideration for appointment to the
board are said to be James A. Bright,
assistant deputy commissioner OF in
ternal revenue in charge of the in
come tax unit, and A. W. Gregg.
attorney In the Office of the solicitor
OF the bureau of internal revenue.
Both are specialists in income tax
administration.
Will Suggest Amendments.
The function of the board, as il is
contemplated by Mr.. Mellon, is to
study the operation of the present
revenue law with view to suggest
ing advantageous amendments The
suggestions of the board will be
placed before Secretary Mellon, and,
In all likelihood, before the President
Tor whatever guidance he may desire
In dealing with tax legislation in his
message to Congress.
But whether. the President suggests
that the income tax rate be lowered
or not, the new Congress is planning
to make taxes one of its main themes
OF debate and action, with lowered
rates regarded as more of a prob
ability than a possibility. Congress
probably will lower the rates or in
crease the exemption in the indi-
vidual returns.
Most Of the talk now on, in tax cir
cles. is that the exemption will be
raised above the $1,000 and $1,000
hEures which now apply. In the case
or married man with small income
der the. present law. There is talk
now OF raising the exemption TO
$4,000 for single men and women and
$4,000 uniformly for married men.
Cut Would Be Far-Reachins.
Should this be DONE. income tax
alton would be lowered. almost to the
persons who at present come under
the $4,000 net income limit. The re-
duction would be felt all along the
line in the higher grades. as well
net income up to $4,000 at the present
time would pay $40 less with an ad-
ditionaI $1,000 exemption: and the
married man paying taxes on more
inn
$50 less annually
Adoption OF this plan. as well as
other proposals, depends largely upon
the report of the specialists who will
eminent actuary, what effect the
raising OF the exemption would have
upon the Treasury. If the $1,000 in
crease in exemption will cost the
5000. windfalI expected by Sec
rotary Mellon, another method prob
ably will be adopted.
The White House has made it plain
to callers that II prefers a general
tax reduction, if there is TO be any
reduction at all, which would apply
all along the line. to a reduction only
in surtax rate. as proposed two years
ago and recently readvocated by Sec
rotary Mellon. 1t seems certain that.
Mr.. MELONS plan will not be adopted
either by the administration or Con-
gresS, without considerable modltica
ton.
Profits Tax Prospects.
OF decided concern to business in
terests is the proposal, gaining con-
verts almost daily. of the so-callcd
progressive bloc to restore the excess
profits tax on corporations. Among
the dozens of proposed amendments
to the income tax which are certain
to come before Congress, none seems
to have quite such rosy prospects as
the restoration of the profits tax.
Officials at the Treasury look for
this tax to como back on the books,
after considerable debate on Capitol
Hill, at the next session. and they
couple with it the expectation that
there will be a substantial lowering
of the tax burden now borne by the
small taxpayer. the struggling mer-
chant, the professional man and the
man or woman on wages or salary.
There are more than 100000 persons
paying taxes on net income of less
than $4,000 a year. Their payments
probably do not aggregate more than
$200,000,000 a year, if, indeed. they
amount to so much.
The first tax reduction advocated in
this year before the national cleo
tons is expected to be d reduction
that will apply to these 100000 tax
payers.