San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-04-09
MELLON WANTS
REDUCTION IN
INCOME TAXES
Treasury Secretary Says
Present High Rate De-
feats Own Purpose.
TOO HARD TO COLLECT
Thinks Taxpayer Would
Come Across If Rate
Cut Is Per Cent.

Washington, ID. c., April Q. - A
$4,000 900 increase in the March COL
Iections Of income and profits taxes
as compared with the March collec-
lions of last year, on which the higher
income surtax rates applied, gives
practical answer TO the tax problem
and "shows clearly what course re-
vision should take" Secretary Mel
lon declared in a statement last night.
Even the present surtaxes rates,
which range to a maximum OF 90 per
cent and give a combined maximum
normal and surtax of IS per cent, Mr..
Mellon said, are tending TO hamper
business and are causing the large
taxpayers to seek every possible means
of avoiding the realization OF taxable
income.
High Taxes Defeat Own Purpose.
There is no point in maintaining
high rates of taxation which do not
produce revenue" the secretary con-
tinued. "and there is no doubt that
the high income tax rates which are
still in effect are gradually defeating
their own purpose. They create artifi-
cial conditions that tend 10 hamper
business and industry and rcdud the
volume of income tax subject to taxa
ton.
The surtax rates. even under the
revenue act of 1921 1.-THE present law,
rise as high as 80 per cent, giving a
combined maximum normal and surtax
of IS per cent, and. as the Treasury
has pointed out in the past. these ex-
cessive rates prevent such heavy
pressure on the large tax payers tc
reduce income subject to surtaxes that
inevitably they seek every possible
means of avoiding the realization Of
taxable income.
Hard to Collect Them.
"The high rates sound productive
but the fact remains that year by veal
they are becoming increasingly inef
fective and are actually operating Z
reduce rather than increase the gov
ernment's revenue, l accordingly rec
commended to the last Congress tina
the surfaces be reduced to a maximum
of % per cent. making a maximum
normal and surtax of 33 per cent an
that at the same time, various aevnue
of escape from the surfaces be close
dc luT as IDcSlDle Tue ldNs
Congress has already acted to clos
some of the gaps. but. for the mos
part, the evil still rxmains and tn
only effective way to reach it is to II
duce the surfaces themselves to NOR
reasonable level in order TO reduce tn
pressure for avoidance of taxable IL
come and keep the surfaces from b,
coming completely unproductive.
VUunxe Da- raut Tut nff
81 am confirmed in the conclusio
by the March collections that il reat
justed to the maximum Of % per Ger
recommended by the Treasury. the SUI
taxes would better accomplish the
purposes and weld at least as lara
and probably larger revenues than III
existing rates without, at the sam
time. involving the country in the III
wholesome consequences which folio
the artificial conditions growing oil
of the present law"
Mr.: Mellon reiterated previous stat
ments that. among other things, Il
March collections indicated "marke,
~ better business during 1922 tina
in 1921. Some of the increase in gel
eral commercial activity, he said. o.
viously is traceable to the recover
from the postwar lump. but the r
lief accorded by the adoption Of ma
of the Treasury's recommendation
on tax revision had given a new inn
ti,s to business and had opened a re,
erally freer flow of capital into pr
ductiye enterprise