New Britain herald., 1924-04-24
SHOOT FIGHTING ID
 GET TAXREDUC7|ON Warns This Is Impossible if Big
 Appropriations Are Adopted DEFENDS MELONS PLAN

! DSN'"'cS SurtdA SldAieS h III Stimulate
 Business and In Long Run Increase
 Revenues From TaSes oa Larger
 Incomes
 Washington. April 2S.--Opening the
 debate today in the senate on the rev. enue bill, Chairman Shoot of the f. nance committee defended the Mellon : income tax rates and warned against
 further authorization by congress of
 special appropriations Test tax rsduc- tion be impossible"
 Warns of Appropriations
 The measure as reported by the | finance committee, he declared, made the fullest tax reduction justifiable in. view of the estimated surplus" Bills calling for the expenditure of sS,l 4S,6O6,176, he pointed out, are pending before congress In addition to the soldier bonus measure approved by both houses for which the outlay next year has been estimated at sls5,- 000,000.
 Therefore" Mir. Shoot said, "au- thorization by congress of the expen- allure of any considerable portion of this amount may wipe out the surplus and make tax reduction impossible"
 Income Tax Schedule
 Turning 10 the income tax schedule about which the main controversy on the bill will center, MT. Shoot de. clared the reductions in surtaxes rec- commended by Secretary Mellon, twill stimulate business, encourage invest ments in productive enterprises and in the long run increase the revenues from the taxes on the larger incomea"
 In placing tho Mellon income rates in the bill, finance committee republi- cans rejected the Lonsworth com promise schedule adopted by vote of republicans in the house. This schedule called for smaller reductions of the surtaxes than the Mellon plan and greater cuts in the normal rates.
 The Democratic Plan
 Senate democrats have proposed . substitute schedule calling for cut in the present surtax rates along ths lines of the Longworth compromise and for normal rates similar to those adopted by the house. This plan is expected to win the support of some republican insurgents.
 In recommending the reduction of the surtax rates, Mir. Shoot declared the committee followed the advice of practically every authority, irrespec- tive Of party affiliationa who had studied the question. Their reduction, he continued, 'has been recommended by Presidents Wilson, Harding and Coolidee. The recommendation of the last three secretaries of the treas ury, Glass. Houston and Mellon--have been to the same effcte with respect to the high surtaxes. Discussing other provisions of the bill, Mir. Shoot directed attention particularly to the and estate taxes. The committee measure, he asserted, "is designed to interfere as little as pos- sible with the business progress and industrial development of the csun- try"
 The increase in the hat corporation tax from f2 1-2 per cent to 14 per cent coupled with the elimination Of the special capital stock tax. he said, will apportlon the tax burden more among the different cor- porations by shifting it 10 a certain extent from those corporations earn ing small return upon their capital" The change also would relieve cor porations, he argued of the burden of preparing two complicated tax rec turns upon two entirely different bases and will greatly simplify the work of the treasury department in auditing returns"
 Referring 10 the amendment Of Senator Brookhart. republican, Iowa, restoration Of the excess profit tax, Mir. Shoot declared this tax had been found arbitrary and fin it's application as well as stifing to business expansion in It's burden" He also denounced sug- gestions for imposition of a tax on profits.
 sound business finance" he said, requires the retention by corpora i lions Of large part of their earnings 1, In order to take care of the business l expansion of the country and at the i same time protect the company ! against future losses. Sound policy dictates that pressure should be put | upon corporations to retain a portion | of their earnings and profits rather 1 han to force them through unsound ' axstion to distribute their entire pro- ' it's"
 The committee rejected the house provision to increase the estate tax | ate from a maximum of 25 per cent ] 0 70 per cent, NIT. Shoot said, be , ,ause a higher rate capnot be collect ! d without affecting adversely the rev | ,nues of the federal government and . If the states, as well as the valus Of sa