The Birmingham age-herald., 1924-02-21
STOCK DIVIDENDS
 TO BE SUBJECT
 TO INCOME TAX
Democrats Win Two More Important Concessions
 From ReactiOnaries

WASHINGTON, Feb. s20.--House democrats, flushed by their victory in the fight on the income tax rates, con tinued their drive on the revenue bill today, gaining two important amend ments.
 Republican insurgents who made pos sible the substitution of the Garner in come rates yesterday for the Mellon schedule, joined again with practical ly solid democratic vote today to make stock dividend profits subject to regu- lar income tax rates rather than to, the IF 1-2 per cent capital asset tax,z and to extend the provisions of the earned income tax reduction.
 Republicans continued to put up a fight, however, and Representative Longworth, the party leader, declared hope was still held of gaining major ity to amend the Garner plan when the bill is brought up for passage, declaring several republicans who voted yester- day for the Garner plan had made in- direct overtures indicating their desire to vote for a republican measure.
 A vote on the tentative compromise advanced yesterday by Mir. Longworth and carrying a STA per cent maximum surtax, with the Mellon normal income rates, was not possible yesterday after adoption of the Garner plan. s
 Hope To Offer Compromise
 Republicans are now studying parlia. mentary rules with view to defeat ing the Garner plan and gaining an op- portunity to present their compromise. A clear cut majority on several parlia- r., .1n make such move successful.
 Reading of the measure, section by section, each paragraph being open for amendment, proceeded rapidly today under the constant urge of Chairman Greene of the ways and means com mittee, in charge of the bill on the floor. When the House adjourned such progress had been male that Represep tative Garner of Teaas. in charge of the democratic figlt on the floor, sag gested an agreenelt be reached to bring the measure nn Cor q final ynte on passage hy mex T .lssdag Chairni T Green indicated fe thought. ,sn sarli T fday might be set. ss
 Few Amendments suppsrted
 Although numerous aIasa5msnt were offered, only those submitted by the leaders received any substantisl support. The democrats stood almost solidly behind both the maJor amend ments adopted, which were proposed by Representative Garner. Mir. Green chided those on both sides,, not mem bers of the ways and means commit tee, which framed the bill who sought private amendments which the commit tee had considered impossible. He de- clared at one point, in seeking to limit debate, that you are making a joke of this measure if you continue such actions"
 Stock Dividends Provision
 The stock dividends amendment pro- posed by Representative Garner and adopted by teller's vote, 162 to 112, provides that stock received either as a stock dividend or as a gift by the tax payer should not be termed capital as- sets. Capital assets held by the tax payers for profit or investment for more than two years is subject only to tax of 121a per cent.
 The amendment to the earned income section, also proposed by Mir. Garner, was adopted on teller's vote, Al to 134, record votes not being possible un- der the rules. It provided that earned income shall include, in addition to wages, salaries and professional fees and other compensation received for personal service where income is de- rived from combined personal service and capital in prosecution by unincor- porated persons or agriculture or other business
 Evasion Section Adopted
 The section on evasion of >surtaxes by incorporation, which was amended in committee from the original Mellon bill draft to require the Secretary of the Treasury to impose penalties if "un- reasonable" profits are withheld from distribution, was read over without question and automatically approved.
 The section in the original Mellon draft required that the secretary find first that corporation was evading the law before imposing the penalty.
 About 73 of the PAP pages of the committee print of the bill had been gone through tonight. The estate and excise taxes, on which it has been an- nounced contests will be waged for amendments, are in the latter part of the measure. #.tf
 The provision for 25 per cent reduc- tion in all 1923 income taxes payable this year is the last section of the bill. Democrats have indicated they will at- tempt to make their schedule adopted yesterday retroactive to 1923.