Evening star., 1923-12-07
BONUS SEEN AS BAR
TO TAX REDUCTION
Mellon, in Report. Urges Cut
in Levy Upon In
heritanceS.

Secretary Mellon, in his annual re-
port transmitted to Congress today,
described Treasury operations under
which the nations debt has been re-
duced s613,674,343 in the fiscal year
1923, and again urged sharp reduc-
ton in taxation based on rigid econ
omy and barring authorizations for
new and unexpected expenditures"
The report contained a copy of Mr..
Melons letter to acting Chairman
Green, of the House ways and means
committee, in which the Secretary
said "a soldiers bonus would post
pone tax reduction not for one but
for many years to come"
To the usual review of official ac-
tivities under his direction. Mr.. Mel
lon attached additional argument for
the general reduction in income taxes
which he has urged. He particularly
stressed the advantage which he has
predicted would come from cutting
the surtax rates upon large incomes
to a maximum ot 25 per cent on the
ground that it would actually in
crease government income, as we'll
as indirectly benefit the public at
large by reducing burdens on produc-
tive operation.
Estimates Big Surplus.
The government. firmly establish
ed on the basis of balancing its bud
get each year" Mr. Mellon said.
brought the national debt, once at a
figure over $4,000, 100000. down to a
total Of s22,os2.2o9.00O on October 81.
The record. he said. was one brought
about "only by the most rigid econ
omy and the application of business
principles to the governments finance
On the present basis of taxation and
expenditure, he cited an estimated
Treasury surplus next July OF about
S329,0OO.0OO. and a possible surplus in
the year after of 1895, 900. 900.
High taxation" the report con-
tinued." even if levied upon an eco
nomic basis, affects the prosperity
of the country. because in its ulti-
mate analysis the burden OF all taxes
rests only in part upon the individual
or property taxed. 1t is borne by the
ultimate consumer. High taxation
means a high price level and high
cost of living. 1t can safely be said
that reduction in the income tax re-
duces expenses not only of the T.
100000 income taxpayers, but of the
entire 100000 people of the Init
ed States.
SuFtux hnte 0ut.
AS to thesreduction' in the surtax
rate, Mr.. Mellon said that the history
of taxation throughout the world in
dicates that means have always been
found by the ingenuity of the ctt.-
zen to avoid taxes inherently exces-
sive." 1t was Significant he said
that the large incomes reported for
taxation were decreasing in number
each year, those over 100000 being
246 In 1921 as compared with 395 the
year before. The estates of the
wealthy, he pointed out, were flow
ing into tax exempt securities. The
Treasury actuary, he continued. es
timated that the reduction of the
surtax to the % per cent maximnn,
against present maximum ranging
up to SO per cent, would actuallv
increase by 1926 the amounts which
the government receives, the lesser
rate being more than compensated
for by the additional volume of tan
paid.
Mr.. Mellon advocated also the re-
duction Of federal taxation on es-
tates after death, on the ground that
this tax was taken mot out of in.
come, but out of capital" with GU
mulative confiscatory effect
Improvement Is Noted,
To general business aspects Mr.,
Mellon directed the comment that i'm
provement from the 1921 depression
had been noted for year Sufficient
credit at reasonable rates had been
available through banks, and he con-
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