Evening star., 1924-02-01
His Own Tax Reduction
Scheme, He Says, Carries
Only $287,814,261 Loss.
PRINCIPAL REDUCTION
SEEN IN INCOME LEVY
Battle Royal Looms in House as
Majority Decides to Back
Secretary.

loss of s347,9S1,491 in revenue with
by the democrats, against a loss OF
S@S7.S14,261 under the Mellon plan,
Secretary Mellon informed Represent
ative Garner. author of the demo-
cratic scheme, without comment in
estimates announced today.
The principal loss, the estimate
points out, would be entailed in the
revenue from normal income taxes
which the Garner plan would reduce
by s1S6,257,2s6. whereas the Mellon
plan would result in loss of $77,-
O14,S54
i, However, the smaller cut in sur
, taxes proposed by the democrats
would result only in a loss of
Sl3S,S03,1 1875, while the Mellon plan, to
reduce these taxes to a maximum of
% per cent. would mean u loss OF
$500, 352,243.
Representative Gamers plan would
cut the normal rate to per cent on
incomes under $1,000, instead of per
cent under $4,000 as proposed by Mr..
Mellon, thus accounting for the
larger reduction.
Based on 1921 Returns.
The figures were based on the 1921
returns and showed that the greatest
loss under the Garner plan would re-
! suit in the taxes on incomes under
$1,000. where s135. 1870 less revenue
would be collected. Reductions under
the Mellon plan would save taxpayers
On incomes of this amount $50,172,577
The estimates considered only
! losses in revenue resulting from re-
f,f i'm
provided for reduction of about
s100, 100000 in the miscellaneous taxes
and the House ways and means COM
mittee already has reduced these
taxes by s103.000,000.
Battle Royal Assured.
Assurances Of a battle royal on the
floor of the House over tax revision
have been increased by the action Of
the republican members of the ways
and means committee to stand solidly
in committee, at least-behind the
Mellon bill without material change.
The majority members Of the COM
mittee. having abandoned attempts to
frame a non-partisan measure. voted
! l to yesterday to support the sur
tax schedules proposed by Secretary
Mellon, the chief bone of contention
-.
Their decision, reached after a con-
| ference with the republican steering
committee. binds them to vote in
committee for the reduction of the
cent, but leaves them at liberty to
act differently when amendments are
taken up on the floor under the recent
modification of the rules.
Three of the republican committee
| men voted yesterday for a 80 per
%
Garner OF Texas, author Of the DEM
ocratic tax plan, which reduces a
surtax maximum only to "A per cent,
reiterated that his party would sup
democrats also are counting on sup
port -om the republican insurgents,
who have declared opposition to the
Mellon rates.
Urges Is per cent Cut.
Reduction of the surtax maximum
to rs per cent was advocated as be-
ing necessary to the Integrity and
future of the whole income tax, in
a letter received by Chairman Green
from Prof. Thomas S. Adams of Yale.
who declared a cut to A. Or 40 per
cent would be useless" Professor
Adams, who served as tax adviser to
the Treasury Department from 1917
was getting under way. also advo,,
Gated taxation of stale and municipal
securities.
Michigan. in a statement assailed the
committees action in refusing to re-
duce the excise taxes on automobiles
and accessories, and charged 1t was
brought about by solid republican
vote. He warned that a fight would
be made when the revenue bill
on this industry. Repeal of the tax
on motor trucks, he said. would re-
duce revenue by $10,700,000, and a
downward revision in the tax on
automobile parts used in repair work
would result in a loss of about $40,-
100000.
Changes In Mellon Bill.
Acceptance of the Mellon income
rates will place the Treasury bill be-
fore the House with only the follow
ing changes Of Importance: Rejection
of the proposed joint tax on COM
munity. property; limitation of the
reductions for earned incomes; re-
striction Of the repeal of taxes on
theater admissions; modification or
the proposed board of tax appeals,
and special reductions in taxes to
apply on those payable this year.
Senator King, democrat, otan. IN
dav which he will offer as an amend
ment to the revenue bill when 1t
comes before that body, proposing te
reduce the normal tax rate to per
cent on incomes under $4,000 and TO
3 per cent on other incomes. He
would reduce the maxium surtaX
rates to IS per cent on incomes of
s17b.OO0 and over. The amendment
also would increase exemptions for
single persons to $4,000 and for mar
ried persons to $4,000.
Under the Mellon rates the normal
taxes would be reduced from to 8
per cent on incomes under $4,000 and
from s to per cent on incomes above
that amount No changes would be
incanA tax naYara.