Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-01-31
COOLIDGE BACKING
ON SURTAX RATE
R0NISE SEEN
BY DAVID LAWRENCE
Ueased Wire Service to The Journal.)
Copyright, 1920

lCopSrlSul, l5Z4.J
WASHINGTON, Jan. 30.-Repub-
Lcan members of the house ways
and means committee have agreed
among themselves to place the maxi
mum surtaX rates at 35 per cent.
They are soliciting the approval of
Secretary Mellon and President Cool
idge, and some of the house members
think the approval will be forth
coming, as it is the best compromise
they think they can get in the house.
Mr.. Mellon proposed % per cent
as the minimum, while the Demo
cratic plan introduced by Represent
ative John Garner, of Texas, pro-
Vides for a maximum of A per cent.
The Republican leaders have been
trying to win converts among the
Democrats, particularly those who
represent districts with large cities
in them, the supnosition being that
the big business interests will be able
to persuade their Democratic con-
gressmen to go along with the Re-
publicans at 35 per cent rather than
jeopardize the chances of the whole
tax question being ground between
the upper and neither milestone of
partisan rivalry
Thirty-five per cent is better than
nothing, and 80 per cent is better
than 44-that's the argument being
used among the conservative Demo-
Gratis enough of whom are said to
be interested in the Republican pro-
posal to encourage the Republican
leaders to so to Secretary Mellon in
order to win his approval.
Those Democrats, who are lean
ing toward the 35 per cent proposal,
do not represent a majority Of their
party by any means, but enough are
said to be lined up to enable the
Republicans with their aid to get
the IS per cent rate through the
house, but these Democrats will not
pledge themselves to vote for it un-
less they have assurance that, Secre-
tary Mellon will accept it, and that
they will be voting for something
that really will be adopted If the
president and the secretary of the
treasury stand pat on the 25 per
cent rate, the Democrats do not want
to put themselves in the position
of abandoning the A per cent rate
in the Garner plan.
Mellon Plan Changed
changing the Mellon proposals con-
siderably. The amendment accept
ed by the committee on Monday
which limits the 25 per cent reduc-
ton on earned incomes to those in
comes of $4,000, is not what Secre-
tary Mellon suggested. He wanted
the 25 per cent reduction to apply
to all earned incomes of whatever
size. The house itself or the senate
may change it later, but the chances
are the maximum will not be in
creased. Another amendment which
was not vital so far as fundamentals
are concerned, but which affects wild
ows, orphans and others who are de-
pendent on the work of others for
their incomes provides that all in
comes up to $4,000 shall be regard
ed as earned income and subject to
a rs per cent reduction Of taxes.
This amendment was inserted be.
cause of the widespread demand that
congress treat widows and orphans
and invalids who are supported by
invested funds on the same basis as
the class who earn their incomes.
The limit of $4,000 it was felt would
take care of all the cases of this
kind, and yet would not carry the
25 per cent exemption too far. Thus
if trust or funds from an insur-
ance policy of approximately $751;
600 are set aside and invested at 6
per cent the annual income would
be approximately $4,000. This would
take a 25 per cent reduction in taxes
just the same as the man or woman
who earns a salary of $4,000 a year.
But if a person has a trust of 500, :
600 the annual income from which
at 6 per cent would be $4,000, the
first $4,000 is subject to the 25 per
cent reduction, but the remaining
$1,000 takes the usual tax rates.
The ways and means committee
is making rapid progress in consid-
ering the bill, and the all-important
question of surtaX rates has, finally
been reached. The next few days
should see significant developments
in the fixing of the maximum surtax
rates.