Evening star., 1924-02-07

pay income taxes. Why do you not
recommend L remedy for this dis
elimination? Your policy has made
it more difficult for industry to get
money at reasonable rates than all
the state and municipal bonds in
existence"
Against Maximum Surtax Cut.
While voting il conformity with the
agreement of republican members of
the ways and means committee that
they would solidly support a favorabl,
report of the Mellon tax bill and then
settle their differences during debate
on the floor, Chairman Green of the
ways and means committee announced
last night that lie is opposed TO Secre-
tary Melons recommendation that the
present maximum SurtaX of SO per cent
be cut to % per cent.
Mr.. Green outlined his views in a
letter to DIR. T. $. Adams. professor of
political economy at Yale University,
phases of the tax problem. Although
the chairman had been known to be
lukewarm on the Mellon surtax sched-
ule, he had not committed himself def
nitely until tonight to a maximum of
at least 35 per cent.
Referring to DR.. Adams letter. Mr..
Green said it contained a statement
to the effect that the extremely
wealthy now defy the government
and intend to continue to defeat it
Doctrine Called Dangerous.
1T is unnecessary to say he con-
tinued. that the political party
which proclaims such a doctrine will
seal its doom with the announcement.
; You say that they will not pay and
We cannot make them. But Canada
! makes them pay g. much higher tax
than we have now, and England
makes them pay a higher tax than
DrnDOSad =
new bill, so far as l know-certainly
very much higher than any / would
advocate. If other nations can do
this what reason can we give for not
doing it?
You say in effect that they will
not pay 35 per cent. which I have
advocated. / say that the man with
| immense wealth who will evade taxes
at 35 per cent will do so at 25 per
cent. In neither case has he any
need for the money which he keeps
, from the government
'I agree with you in your criti-
cism of legislators who champion
the extremely high surtaxes, and at
the same time favor tax free bonds.
but here again I make the assertion
that reduction from 35 per cent to
25 per cent as the maximum surtaX
will have little effect on the invest
ments of the extremely wealthy in
tax free securities and it will still be
largely to their advantage to invest
in them. 1t would require a still
lower rate to make them unattractive
to the multi-millionaires.
Losses to Government.
ALSO, no matter how low the max
imum surtax is there will still be
the same amount of tax exempt Sc
curities in circulation and the same
amount withdrawn from active busi-
ness for investment therein, and
about the same amount in taxes lost
to the government.
The fact is, that while the govern
ment has lost much by the tax-eX-
empt securities. 1t has not lost SO
much in the extreme upper brackets
of the income tax from this cause as
! it has from the division of the es
I tates which, unless checked, will con-
tinue just as much at 25 per cent as
at 35 per cent or 40 per cent"
The announcement of Mr.. Green a g
| to his stand on surtaXes and the de-
cision of democrats on the ways and
means committee to stand pat on
their demand that the surtaX maxi
mum be reduced no lower than A
/! per cent on incomes in excess of S92.-
900 insures a lively fight on the floor
when a vote comes on this phase of
the tax bill. Mr.. Green and other
republican members of the commit
tee, out Of sympathy with Mr.. Mellon
:. on one or more provisions of the
bill, have reserved the right, after
voting to report it, to swing away
from the administration position dur
I ing consideration of the measure by the
House.