Evening star., 1924-04-08
Finance Body Orders Favor
able Report on Strict Party
Vote-Scope of Reductions
Slightly Narrowed.
$69, 900, 600 DEFICIT
ESTIMATED BY SMUUT
Treasury Revision Scale Proposed.
Miscellaneous Items Stricken
Out by House Decentralization
to Be Asked Next Week-Speed
on Bonus Issue Sought.

The new revenue biil was of6eree
favorably reported to the Senate to
day by the finance committee
1t provides, as reported, for a
retroactive reduction of Is per cent
on 1923 income taxes which are pay
able this year; permanent revision
of the income tax rates in accord
ance with the plan of Secretary
Mellon: a special reduction OF Is
per cent III taxes on earned income,
and repeal of many of the rniscs7-
laneous and excise taxes.
Reductions Narrowed.
The scope of tax reduction was mar
rowed, however, from that provided
by the House bill, warning of
Treasury deficit under it's terms haS-
ing forced restoration of some of the
miscellaneous taxes stricken out
during House consideration of tho
measure.
The measure was ordered reported
on strictly party vote, to Z. Chair
man Smoot said Democrats an
nounced their opposition was based
on the Mellon income rates schedule
carried by the bill.
The committee will be called either
tomorrow or Thursday to take up the
soldier bonus bill, Mr. Smoot said. He
predicted not more than three days
would be required to get a report on
the bill.
To BE Called Next Week.
The chairman does not expect to
call the tax bill up for consideration
in the Senate before the middle OF
next week.
AS framed by the committee, Mr.
Smoot estimated the tax bill would
fail by $69,oo0,00o of raising sufficient
revenue to meet the regular govern
ment expenses in the first year of it's
operation. This estimate did not take
into account. he added, special ap-
passed by Congress this session, in
cluding the soldier bonus bill which
II has been estimated would require
an expenditure OF $135, 100000 the first
year.
Cut Treasury Provision.
In winding up consideration of the
measure the committee reaf1irmed its
action of last night. eliminating tho
Treasury provision to tax indirectly
the income from tax-exempt secur-
tiles This provision, it was estimat-
ed would have netted the govern
ment s35,ooo,oo0 annually
A protest against the section limit
ing deductions on gross incomes on
account of interest payments was
made to the committee by Gov.
Ritchie of Maryland. Senator Smoot
said the constitutionality of such a
provision was somewhat in doubt.
The question will have to be decided
on the floor.
The Mellon income tax rates now in
the bill provide for per cent nor
NAL tax on incomes of $4,000 and
under and per cent above that
amount The surtax rates start at l
per cent at $4,000 and graduate up
to a maximum of 25 per cent at $780,
600. SurtaX rates in the present law
start at l per cent at $4,000 and in
$780, 900.
Democrats Seek Substitute.
Committee democrats have been
working out substitute schedule
which, it is understood, will differ
somewhat from the Garner plan for a
a. per cent maximum surtax rate
supported by House democrats. AL
though republican leaders are in
clined to believe there is little hope
for adoption by the Senate of the
Mellon rates. mo- compromise sched-
ule has been worked out. nor has any
support been given openly to the
Longworth plan adopted by the
House republicans.
The Longworth plan provided for
normal taxes Of per cent on incomes
below $4,000: 5 per cent on incomes
between $4,000 and $4,000, and per
cent above that. 1t called for fiat
25 per cent reduction in surtax rates
in the present law. which would make
the maximum 371a per cent At
100000.
House Increase Cut.
The increase voted by the House
in the estate taxes was eliminated
by the Senate committee, as was -.ss
new gift tax voted by the House.
The committee, however, imposed
the only new taxes carried by the
bill, 10 per cent each on radio and
nah jong sets.
they will propose several changes in
the tax schedules, particularly as re-
CARDS the Mellon income tax voted into
the bill by the republicans in place of
the Longworth compromise rate adopt
ed by the House. The floor fight is
expected to hinge largely on the rate
schedules. Practically all the ad-
ministrative provisions of the bill were
agreed to by non-partisan votes.
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