Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-03-04
NEW TAX MEASURE
INDICATES POLICY,
CLAIM DEMOCRATS
National Committee Issues
State ment Clarifying
House Action on BiII-Par-
tiaI Victory Claimed


tax bill as it passed the house yes
terday was described in a statement
tonight by the Democratic national
committee as having vindicated,
with some exceptions, the policies
I advocated by house Democrats.
The statement follows:
1.-THE action of the house of rep
resentatives on the various proposed
internal tax reduction measures
shows a complete reputation Of the
policy of Secretary Mellon and Presi'
dent Coolidge to the effect that the
secretary of the treasury should
draft in secret an internal tax re-
duction to be reported in it's every
detail, coupled with a subsequent
demand by the secretary and the
president upon congress to pass the
bill without compromise.
"On a direct vote in the house The
Mellon tax plan was overwhelming
ly rejected by a vote Of 261 to 1913,
the ballot showing that sixty-tWo
Republicans had voted against it,
while many Republicans voted for it
only because they knew in advance
it had no chance to pass. The
theory of Secretary Mellon that the
largest taxpayers want their sur
taxes cut in half so that they can
pay more revenue to the govern
ment in the way of income taxes
has been thoroughly exploded.
'In the second place, the out
rI,1 in
the house pointed the way to tax
reduction by offering a bill along
the lines of which any measure at
all possible to pass must be framed,
The Observation-Disclosures compro-
mise measure, finally adopted, is al
most identical with the Democratic
proposal as to certain of it's princi-
pies, while the principle underlying
the higher surtax provisions of the
Long orth-LaFollette measure are
reputation of the principle under
lying the Mellon higher surtax pro-
posals, and they, at the same time,
tend to approach the principle of
the Democratic surtax plan.
Points of Difference
'The only two points of substant-
ial difference between the Demo
cratic and the Longworth-LaFoll GILLETTE
measures are, first, that the Demo
cratic proposal raises exemptions
from 81 900 and $4,000 for single and
married persons, respectively, to g.
600 and $4,000, thereby releasing
about 100000 persons, now required
to make returns without being sub
Ject to taxes, from making any re-
turns, and releasing from further
taxes nearly 1,646,000 persons whose
average taxes are under $1,000 each.
THE LongWorth-LaFoll measure
gives no relief as to these eXemp-
lions, although these millions of
persons are already paying most
grinding tariff taxes.
1.-THE second point of chief differ
ence is in the higher surtax brack-
cts due to the flat 25 per cent re-
duction of each surtaX rate under
the Longworth-LaFoll plan. I'm
der the operation of this flat 25 per
cent reduction method, the Long
worth plan would effect substantial
ly larger reductions of the taxes of
Nbetween $4,000 and 10000 of the
biggest individual income tax payers
with incomes in excess of SAC, 900 and
upward, than the Garner Demo
cratic plan The application of
flat 25 per cent reduction of all
graduated rates is obviously both
arbitrary and unscientific. because
the chief reduction benefits go to
those with the large incomes and
subject to the higher rates. The
higher the rate, in other words, the
greater and the more disproportion-
ate are the reduction benefits as
compared with a like % per cent re-
duction of the smaller surtax
rates.
Condition illustrated
This condition could be no more
clearly illustrated than by the fact
that the Democratic tax proposal
affords larger surtax reductions on
incomes up to $4,000 than the
Longworth-LaFollette proposal, and
hence when these two proposals are
applied to the rates on the higher
incomes. the Longworth-LaFoll
reductions increase much more rap
idly than the Garner Democratic)
reduction of taxes. The latter scale
of rates is based somewhat on the
usual method of graduation, while
the former makes arbitrary depart
Longworth-LaF'o plan gives a
reduction of $4,000 on an income
OF $25O,OOO, but only SIS on an in
come of $4,000.
The tax outcome in the house
has in other essential respects fully
| confirmed and indicated the atti.
tude and policy of the Democrats, in
that the first step in successful in
I
date reform. reorganization and re-
vitalization of the administration of
the law by the treasury depart
msnt.
In the second place. it is now
very clear that in addition to ad-
ministration reform, and before
rates can be considered with any
detiniteness. congress must place
upon a relative equality, for the
/ purpose of the tax, the incomes of
individuals, partners and stockhold-
ers of corporations. This equaliza-
ton of income involves the stoppinc,
of number of large holes through
which taxes are either avaded or
avoided.
! Adequate Revenue Assured
With these two prerequisites
properly dealt with. it would then
become no difficult matter to effect
either rate further reimbursement So
! as to secure adequate revenue under
well-balanced and proportional rates.
which, in their effects, would not
/ be unduly burdensome. or punitive
or oppressive to any class of bust
ness or of individuals.
Looking back at the course of
the propagandists for the Mellon
plan. which at no time has had the
slightest chance to pass the house.
it strongly appears that a part of
the tactics has been to divert atten.
/ ton as fully as possible from all
/ rnna SnS nf fn,.iff ,.nH,rntinr, n,