Evening star., 1924-04-27
Bitterest Contest of Session.
With Party Lines Sharply
Drawn Is Expected.
FIRST SHOWDOWN DUE
ON MELLON SCHEDULE
Smoot to Fight Step by Step for
Lowest Figures 0btainable,
He Announces.

into the income tax rates. the crux Of
the controversy on the revenue bill,
under a program announced yester
day by Chairman Snlcot Of the finance
committee, in charge of the measure.
Most of the controversial com
mittee amendments already have been
disposed Of.
The contest is expected to precip-
itate the most bitter legisla tive fight
Of the session, in which party lines
will be sharply drawn. A showdown
will be demanded first on the Mellon
rates, placed in the bill by finance
committee Republicans in place of
the Longworth compromise adopted
by the House,
Leaders Maneuyer.
However, practically admitting the
futility of obtaining the adoption or
these rates, Republican organization
leaders maneuvered yesterday to de
feat a practically solid democratic
lineup for a schedule calling for
higher surtaxes and lower normal
rates than the Mellon plan.
Chairman Smoot said if the Mellon
rates were rejected he would offer :.
succession of amendments, going up
step by step on the maximum surtax
rate. A schedule lower than that
proposed by the Democrats and about
the same as that adopted by the
House on surtax rates would be
adopted, he predicted.
Other Republican leaders are not
so optimistic, while Democrats pre-
dict their plan, advanced by Senator
Simmons of North Carolina, ranking
Democrat on the finance committee
calling for a maximum surtax rate OF
40 per cent on incomes of s50o, 900 and
over and 3s per cent on incomes OF
100000, will be adopted with th-
support of Republican insurgents.
Rate Asked BY Mellon
The Mellon plan would cut the pres
ent maximum surtax of SO per cent
applicable to incomes of s2OO,ao0 and
over, to 25 per cent on 500, 600 and
over
Mr.. Smoot said if the Mellon rates
were reected he would DER a max
imum surtax rate of so per cent. TIL.
program, if this was turned down. he
said, had not been fixed 1t was init
mated, however, the next PROPOSAL
would be 80 per cent, then 35 per cent
ana later, If necessary, 37k per cent.
The latter is the rate in the Long
worth compromise and this is ex
pected by many Republicans to b.
the maximum which the Senate will
accept.
In Line With HOUSE.
Decision of majority leaders TO get
vote on the Mellon rates is in keen
ing with the action of House Repuh-
lican advocates of the administration
plan. However, only 162 votes were
cast for these rates in the House
where Democrats were bound by a
party caucus to support the Garner
plan This was less than a third or
the House membership.
In this Connection, it is conteadel b,.
compromise advocates that agree
ment by the House to any rates lower
than the Longworth compromise
would be almost impossible and.
therefore, adoption by the Senate OF
a lower rate schedule would be fu-
tile. since ratification would be neces-
sary of conference report by the
House.
Chairman Smoot said all amend
w nj ha
the income rate schedule would in
clude an entire plan, with norma
and surtax rates, since an even bal
ance would be necessary to assur.
collection of sufficient revenue. in
proposing substitute amendments, il
necessary. he added, he would stick
as far as possible to the normal rates
in the Mellon plan.
Schedule of Mellon.
These are 3 per cent on incomes Of
$4,000 and under, and per cent
above in place of 4 and per cent.
respectively, in the present law. The
normal rates approved by the House
were 2 per cent on incomes below
$4,000; per cent on incomes be-
tween $4,000 and $4,000, and 6 per
cent on incomes above $4,000.
Reduction of the normal rates was
one of the points insisted upon by
House insurgents, who held the bal
ance of power and finally made adop-
ton of a Republican schedule pos
sible. This is expected to be insisted
upon also by Senate Republican in
surgents.
The Simmons normal rates are .
per cent on incomes under $4,000; 4
per cent on incomes between $4,000
and $4,000. and s per cent on incomes
above that amount.
Rates of Extension
Neither the Mellon or Simmons
plan calls for much of a change in
exemptions allowed in the present
law. While the Mellon plan would
make no change, the Democrats
would allow an exemption Of $2,500
for all heads of families. The pres
ent law allows this exemption for
heads of families with incomes of
$4,000 and less. and $4,000 otherwise.
Senator Harris. Democrat. Georgia.
Continued on Page 2. Column g.