Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-02-26
GIFT TAX IS CUT;
|NSURGENT RANKS
BREAK ON SURTAX
Woodruff to Back 81 1-2 Per
Cent Rate-Must Win
Wisconsin Members.

4 gift tax was placed in the rev.
enue bill today by the House.
1t would impose a graduated scale
of rates, from 1 to 40 per cent. the
minimum applying to amounts not in
excess Of $4,000.
The vote was 19l to Go. Democrats
voted almost Solidly for the amend
mont, which was proposed by Chair
man Green, Iowa, Of the ways and
means committee.
Negotiations between republican
or ganisation leaders and insurgents
today on the Longworth compromise
income rate schedule of the revenue
bill developed a definite break in the
ranks of the latter group, which voted
to put the democratic rates in the bill.
Representative Woodruff. Michigan,
one of the !nsurgent leaders, said he
would support the compromise, pro-
yiding for S7ls per cent maximum
surtax rate and normal rates of and
6 per cent on incomes below and
above $4,000, respectively, in view Of
the increase voted in estate taxes.
Some Yet to BE Won.
Representative Begg, republican.
Ohio, who conferred with Mr.. Wood
ruff, said, however. that before the
democratic rate schedule could be
thrown out of the bill when it comes
up for final passage some of the Wis
consin delegation of eleven members
must be won over to the compromise.
Representative Nelson, Wisconsin.
declared members from that state
had not changed and would support
the democratic rates if a vote came
again.
Uncertain of Income.
No estimate as to probable increase
in revenue which would result under
the change in the estate tax rates
voted into the revenue bill yesterday
was given. although both Represent:
alive Mills and Representative Long
worth, republican leader, declared not
more than $25.oO0.o00 additional an
nually could be expected because OF
the Frear amendment. which allows
credit on state estate taxes.
Exemption allowed estates of for
mer service men from the estate tax
under the present law was eliminated
on motion of Representative Fair
child, republican, New York, who in
sisted the mass of enlisted men were
not affected by such a tax, and the
exemption resulted merely in dis
elimination in favor Of relatives of
rich Army officers who served in the
world war.
An amendment proposed by Repre-
sentative Dickinson, republican, Iowa,
to place a graduated tax on tax
exempt securities in the estate Of q
decedent. was voted down. 14S to 1872.
An amendment also was voted to
allow credit for estate taxes paid
to states up to % per cent Of the
tax levied by the federal govern
ment This was proposed by Repre-
Frear, republican insurgent,
wisconsin, in reply to the argument
New York, that an increase in this
tax would make 1t a permanent part
Of the federal taxation system and
deprive states ''of a vital
of their revenue"
Administration spokesman let it be
known yesterday that If their tax
reform program, as carried in the
Mellon bill. does not get through
at this session 1t will be brought
up again next winter. Secretary
Mellon believes the country will show
its favor toward his plan at the
elections this fall and that it's sue
cess in the next Congress will be
a ssured.
Representative Frear, speaking for
the republican insurgents. issued a
statement yesterday declaring his
group was not disturbed over the
Longworth compromise for a Is per
cent reduction in the surtax rates,
which would cut the maximum 37A
per cent instead of the "A per cent
now in the bill. He called upon Mr..
Longworth to make public his plan
SO that study might be given 1t. Mr..
Frear also denied any formal Goa
lition with the democrats, declaring
the insurgents supported the demo-
cratic plan because 1t was the next
best plan to our own" He called
attention that democrats had aided
in defeating their proposals for tax
ing present tax-exempt securities. =
New Estate Tax Rates.
The new estate tax rates, compared
with existing rates. applying to the
amounts Of the net value of an es-
tate in excess Of those stated, follow:
New Existing
rates. rates.
Per cent. Per cent. Amounts.