Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-05-06
REPUBLICANS FIGHT
LOSING ATTLEFOR
MELLON TAX PLAN

day in the opening skirmish in the
senate fight on income tax reduc.
tons in the revenue bill when the
Democratic attack was led by Sen
ator Simmons, North Carolina. Sen.
ator Mclean, Connecticut, the Re
publican spokesman, conceded, how
ever, he was fighting a losing battle.
Many OF the vital provisions OF
the Mellon proposal already had
been repudiated by the senate, Sen
ator Mclean said, and he added
that in the face OF the Democratic
conference, approval OF the Simmons
plan. 1T Is a sheer waste OF time
to be arguing the normal and sur
tax rate reductions.
Senator Simmons assailed as "un-
fair and discriminatory" the Mellon
rates providing for a reduction in
the maximum surtax rate from oo
to 20 per cent, and reinserted in the
bill by financs committee Repub-
licans in place Of the Longworth
compromise adopted by the house.
Less than a score of senators
were on the floor during the debate,
and on the conclusion of the two
speeches, discussion centered on
other topics. Senator Mclean called
attention that for some time only
six members were present, land
only three part of the time
Chairman Smoot, Of the finance
committee, in charge of the bill, re-
iterated today he would seek night
sessions next week. There were no
indications of when a vote would
be possible on the income tax sched-
ule, the heart of the bill, although
some leaders predicted it would be
possible Monday.
Based ON Ability to Pay
Explaining the Democratic in
come schedule, Senator Simmons
said it was based on the principle
of ability to pay. 1t calls for a re-
duction in the maximum surtaX TO
40 per cent, but would allow greater
cuts in the normal and lower sur
tax rates than would the Mellon or
house plans.
Senator Mclean declared, "a low
surtaX in years Of full production,
which means full employment and
consumption, will bring much more
than. a high surtax which can and
will be evaded, and the direct effect
of which, if not evaded, will be to
retardI both production and con-
sumption"
I'm 1916" he. continued, with a
maximum surtax of 10 per cent, the
treasury collected $S1, 100000, and in
1921, with q maximum of 90 per
cent, the treasury collected from
these same taxpayers, only 1884,
100000"
Senator Simmons argued that
more, of a reduction should be made
on the smaller incomes than pro-
posed by Secretary Mellon He de-
clared that Democrats believed in
reduction to the limit, but opposed,
at this time, so much of a cut in
the surtaX rates.
Senator Mclean advanced the
suggestion that the maximum surtax
be cut to 20 per cent, a sales tax
of one-half of 1 per cent be imposed,
taxes on luxuries of 5 per cent be
made, and issuance of tax-eXempt
securities be prohibited.
Opening the Democratic income
tax battle, Senator Simmons leveled
an attack on the Mellon rates which
he described as unequal and dis
criminatory." The Democratic sched-
ule, he declared, was based upon the
LIdulIlOudl pIlIClple VI dbIilIJ ~
pay, while the so-called Mellon plan
reverses that principle"
Propaganda Denounced
Senator Simmons denounced the
System of propaganda" which he
said had placed the Mellon plan be-
fore the country and had charged
Democrats with opposing tax reduc-
ton when they denounced it."
mo propaganda, no scheme Of
publicity" Senator Simmons contin.
ued, was ever more powerfully fl
nanced and ably engineered and di-
rected. On the other hand, the OPP
ponents of the program were unor-
ganized. But the result Of this prop
uganda for the two-fold scheme-to
untax the rich and kill the bonus
is overwhelming, crushing repudia-
ton.
''The Wanted Mellon plan was
able to command but a few votes in
the house and it is now known that
it's few sponsors in the senate have
abandoned hope, IL they ever had
any, and are fishing on both sides
~ the chamber for A compromise.
&~the overwhelming reputation which
lis proposition has so far received
is conclusive evidence of its utter
lack of merit and of it's amenabil-
ity to the charge leveled against 1t
of its inherent iniquity and selfish
ness.
"In the reduction of war taxes
made in 1921, large incomes We're
relieved to a. FAR greater extent than
small ones. The excess profits tax
upon corporations was repealed,
thus RENTING over four hundred
millions of dollars in taxes, thereby
increasing the incomes of the indi-
vidual stockholders of those corpo-
rstions. That reduction in individ-
ual income tax was chiefly for the
benefit of the larger taxpayers.
Small Incomes Neglected
The total of reductions then ad-
corded to the larger incomes was
between five and six hundred mil
lions of dollars. while small individ-
ual incomes received only small
share of the reduction then made. "
IF the Mellon plan should pass,
the big incomes would again get the
lions share of the reductions. In
deed, 1t is now apparent and gener-
ally recognized that the paramount
objective of this scheme is to re-
duce the surtaXes of the big taXpay-
ers. For this reason we feel that
in the reductions now to he made,
special consideration should be ac-
corded to that class of income tax
payers who were unjustly discrimf-
mated against in the 1921 revision.
For these reasons the reductions we
have made on incomes of less than
$4,000 ara much greater than those
made under the Mellon plan and less
than those proposed in any plan
that has been suggested.
DENLY Visits Coolidge
WASHINGTON, May S.-Edwin
DENLY, former secretary of the navy,
called on President Coolidge today
but explained it was merely a