Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1924-01-07
Offers Substitute
(Continued from Paue Onel

Offers Substitute
| Continued from Page ons)
maximum of so percent on incomes
| OF more than 100000
| Increase the exemption Of the head
OF family from $500 to $4,000 and
for a single person from $1,000 to
$4,000. The Mellon plan would con-
| tinue the present exemptions.
| Fix the deduction allowed on earn
ed incomes at SO 1-3 percent instead
of 25 percent az recommended by the
treasury secretary. and broaden the
| provision so as TO include farmers
owning and personally operating
their farms and merchants and
tradesmen who combine capital and
! personal service for the purpose of
earning income.
Representative Garner in a formal
statement outlining the minorlty's
program, made this reference to the
| 50 called nuisance taxes:
There was no reason to single out
one or two of the miscellaneous or
nuisance taxes as Secretary Mellon
did and propose their repeal with
out at the same time carefully an
! alyZing the entire mass of these
taxes, including those on automobile
trucks, jeweiry, candy, stamps on
notes, etc., ana OilStlllS lHS uidA
Of relief"
Honest and equitable peace time
taxation is the goal of the Demo-
cratic party" Mr.. Garner said. The
foregoing proposals are in pursuance
of this policy. Resting upon sound
economics, We believe that they do
full and equal justice taxpayers,
large and small. individual and CO.
operate and avoid the extreme view
of any class.
I'VE ask an unbiased comparison of
the Democratic tax proposals with
the Mellon proposals and with full
| confidence invite the deliberate
judgement of taxpayers and of all the
people"
Mir. Garner said the Democrats
woIld give wholehearted support to
many good features" of the Mellon
program, particularly the provisions
aimed at more efficient administra-
ton OF the revenue law and to close
up avenues OF tax evasion. He added
the general idea Of readjusting
downward normal rates and surtax
rates in many instances. together
with reduced rates on income derived
from personal service is excellent"
Pointing out that no Democrat
had been consulted in the prepara-
ton of the Mellon plan, Mr.. Garner
said the minority members of the
ways and means committee had only
just now been able to reach prelim-
mary conclusions relative to some
phases Of the Mellon proposal.
In the Mellon bill the slrtax would
begin at one per cent on net incomes
from 100000 to $4,000 and increase
progressively one per cent for each
$4,000 up to $4,000: then an addi-
tional one per cent for the next S4,
900 and then, beginning at $4,000.
one per cent for each six thousand
dollars to a maximum of 20 per cent
on 100000 or more.
Under existing law surfaces begin
~ one pei cent on incomes between
$4,000 and $4,000 and increase to a
maximum OF 80 per cent an incomes
exceeding 100000.
'..The difficulty of the treasury or
any person fixing a just and scientific
scale of SurtaX rates is Obvious Mr..
Garner said. lin view OF the fact that
the larger portion OF income subject
to these rates is derived from cor
porate profits, especially after the
proposed reduction of rates on earned
incomes goes into effect. This is true
because during recent years. or at
least prior to 1922. corporation own
ers have been retaining in their cor
porations more than sixty per cent
on the corporate profits, While dis
tributing less than an average of
forty per cent on paying surfaces
! thereon.
'F'or the years 1919. 1920. and 1921,
the aggregate corporate profits. after
paying all expenses and profits and
! other taxes. except the income tax
proper. were nineteen billion dollars
while only S7.663 900, 900 was distri-
buted as dividends and paid surfaces
ut is apparent, therefore. that the
proper scale of surtax rates is great
ly affected by the extent to which
the corporate profits are distributed
or retained in the corporation and
should be increased Or decreased az
cordingly. The PROPER scale can best
be ascertained by degrees.
I'VE are obliged to keep in mind
| also that surtaX rates are to on
siderable extent nominal rather than
actual. For example, an income of
100000 Is subjected to 4S per cent
surtaN under existing law, but the
! total tax paid is $30.076 or 80 per
cent of the income instead of the
prescribed as per cent The proposed
1 81 1-3 per cent reduction on income
derived from personal service was
distinguished from property or can't
tai invested will only tend to equal
ize the amount of taxes paid on
, earned and unearned income, res
pectively. as is patent from the fore
going recital.
The raising OF individual exemp-
tions from $4,000 and $4,000. respec-
lively, will result only in losses OF
between S40,000.000 and $50. 600, 600 but
will relieve between 100000 and L.
100000 individuals who now make tax
returns, but pay no taxes on account
of deductions allowed and will also
, ! relieve 1.616,000 laborers and small
farmers and merchants whose tax is
less than S12 each, not tc mention
Il heads of families now in the $4,000 to
$4,000 bracket. and will at the same
time relieve the treasury of a ire
mendous burden and expense where
but small amount of tax is in
volved.
with the understanding that tar
if tax reduction measures should be
Kept separate from and should in no
wise affect the consideration of in
ternal tax reduction legislation, we
are unalterably of the opinion that
substantial and immediate relief
should he had from several phases
of existing outrageous tariff extor-
tions. The present astonishingly high
tariff taxes constitute the outstand-
! ing factor in the existing high cost
of living.
These monstrous high rates con-
stitute a surtax upon the masses
even higher than the income surtaxes
! indst.iI,,~lu Vyn,,I1 x,nt n,slx, 10