Evening star., 1924-04-24
SENATE CLEANS Up
CALENDAR TOPUSH
TAX CUT MEASURE
Smoot Predicts Two Weeks
Consideration-OtherS See
Longer Debate.
RECESS FOR CONVENTIONS
IF WORK NOT FINISHED
Special Reduction on 1928 Income
Taxes Promised Before June
Installments Due.

The Senate cleared the calendar OF
some minor bills today preparatory
to pIuuSing into consideration OF the
taA reduction measurc-the major
item on its Legislative program ard
IL" most controversial The revenue
htn was made the unfinished business
"' he Senate Yesterday Immediately
;.etor passage Of the bonus bill.
Expecting TO get to work on the bill
today. Chairman Smoot of the finance
committee declared it would be held
before the Senate until definite prog
reSs had been made toward it's dspo-
-itiou. He predicted at least two
weeks would be required for consid
"ration OF the bill, but other leaders
expressed the opinion that more time
would be necessary.
Planning June Recess.
only five weeks remain before the
time tentatively set by leaders of
both the Senate and House for ad-
j"urnment. The Republican conven-
tion meets June 10, and recess for
this and the Democratic convention,
later in the same month, will be
impossible, but Representative Long
worth, Republican leader in the
House, is definitely planning to end
he session by June l.
The second inStallment of 1928 in
come taxes falls due June Is, and
the provision for reduction of %
per cent in these levies is contained
in the pending bill. Both House and
ever, that if the bill should not be
passed before that time, this proVi-
sion would be removed and enacted
in special resolution.
Opening the debate today in the Sen
ate on the revenue bill, Chairman Snoot
defended the Mellon income tax rates
and warned against further sauthori-
cation by Congress of special appro-
priationS.
The measure as reported by the
finance committee, Mr.. Smoot de-
clared, made the fullest tax reduc-
tion justifiable in view of the esti-
mated surplus" Bills calling for the
expenditure of So, 143, $685. he point
in addition to the soldier bonus
measure approved by both houses,
for which the outlay next year has
been estimated afdna at So, oo ,ooo,oGe !ai9
thorzation by Congress of the expendi-
ture of any considerable portion of
this amount may wipe out the surplus
and make tax reduction impossible"
Stimulus for business.
Turning to the income tax schedule,
about which the main controversy on
the Hill will center, the committee
chairman declared the reductions in
surtaxes recommended by Secretary
Mellon will stimulate business. en-
courage investments in productive
enterprises and in the long run in.
crease the revenues from the taxes
on the larger incomes"
In placing the Mellon income rates
in the bill, finance committee Republi
cans rejected the Longworth 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.
Senate Democrats have proposed a
substitute schedule calling for a cut
in the present surtax rates along thes
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, Mr. Smoot declared
the committee followed the advice of
practically every authority, irrespec-
tive of party Affiliations. who has
studied the question.
Favored by Three Presidents.
Their reduction he continued.
''has been recommended by Presidents
Wilson, Harding and Coolidge The
recommendations of the last three
Secretaries of the Treasury-Secre-
tary Glass, Secretary Houston and
Secretary Mellon-have been to the
same effect with respect to the high
Surtaxes."
Discussing other provisions of the
bill, Mr.. Smoot directed attention
particularly to the corporation and
estate taxes. The committee meas
ure. he asserted, 'is designed to in
terfere as little as possible with the
business progress and Industrial de-
velopment of the country"
Increase in the fiat corporation tax
from 1212 per cent to IA per cent. |
coupled with the elimination OF the
special capital stock tax, he said
will apportion the tax burden more more
equitably among the different cor
porations by shifting it to a certain
extent from those corporations earn
ing a small return upon their capital,
such as public utility corporations
to those earning a large return upon
their capital" The change also wouId
relieve corporations, he argued. of
the burden of preparing two com
tfrely different bases and will great
~ simplify the work of the Treasury
Department in auditing returns
Excess Profits Tax.
Referring to the amendment of |
Senator Brookhart, Republican, Iowa. |
proposing restoration of the excess
profits tax, Mr.. Smoot declared this
tax had been found arbitrary and in
equitable in it's application as well
as sitting to business expansion in |
its burden" He also denounced sug-
gestions for imposition of a tax on |
undiStributed profits.
Sound business finance" he said |
requires retention by corporations |
of a large part of their earnings in |
order to take care of the business ex-
pansion of the country and at the |
same time protect the company |
against future losses. Sound policy |
dictates that pressure should be put |
upon corporations to retain a por- |
tion of their earnings and profits |
rather than to force them through
unsound taxation to distribute their
entire profits"
The committee rejected the House
provision to increase the estate tax
rate from a maximum of 25 per cent
TO 40 per cent, Mr. Smoot said, be
cause higher rate cannot be col
lected without affecting adversely
the revenues of the federal govern
and nf he fat we'll he |