The Washington times., 1924-01-05
COOLIDGE SENDS
WORD ON TAX
CUT PLAN
Opposes Congressional Tinker
! ing With Vital Parts Of
Mellon Proposal.
BY GEORGE r.. HOLMES,
International News service.

The vision Of q "big stick
softly applied the snarl-
ing factions of the Sixty-eighth
Congress today following the an
nOunceEnent by the White House
that President Coolidge is uncom-
prontstngly opposed to any Con-
kressionai tinkering with the prin-
cipIes and figures of the Mellon
tax bill.
Whether so intended or not, the
positive pronOuncement on behalf
Of the President carried with It the
inference that If the Sixty-eighth
Congress finally brings out a tax
revision measure that IL radically
different from WhaL Mellon has
proposed, the President may find
himself compelled to veto Vt.
.Insurgeu.s' Not Alarmed.
The gaunt specter Of this situa-
lion arising was enough TO send
cold shiyers down the hacks ,oe the
Republicans In both Senate and
House. who depend upon their party
regularity In large measure Tor
heir political livelihood.
To the Democrats and the in
surgents, the prospect Of a Re-
publican President having to veto
a tax reduction measure from
Republican Congress In a campaign
year was not alarming. but to the
Republican regulars IT was q veri-
table ,bugabo0 and 1t was dwelt
much upon in the offices and lob
bies Of the capitol.
The White House did not say the
President would exercise his veto
power on a tax bill that represents
the combined efforts Of the Demo-
Gratis and the Republican insurgents.
Neither did It indicate he would
sign It. The statement was merely
made that Coolidge strongly disap-
proves of any tinkering with the
vital parts Of the Mellon bill, as
written, and it was left to the
imagination Of those at the Capitol
as to what he would do in such a
situation.
Veto Ks Scented,
Nervous Congressman were quick
enough to scent a possible veto.
And the question they were asking
themselves today was:
At a time. when the whole coun-
try is aroused over tax reduction.
would a voto Of any tax reduction
measure by a Republican President
react against the President in the
approaching election, or would itI
react against the Congressman. UP
for reelection. who failed to carry |
out his mandate? l.
The answers to this political ques- |
ton were az many and as varied 7
as there are tax reduction plans |
in the Sixty-eighth Congress. Every.
body has a plan.
Point Of Opposition.
The President IL understood to |
be principally opposed to the twin !
propositions, advanced by some |
Democrats and heartily endorsed by |
the La Toilette insurgents, of re- |
the excess profits tax,
and the retention of the maximum |
surtax of so per cent, or even IS
per cent.
The present surtax is so per
cent. figure which, Secretary Of |
the Treasury Mellon reiterated to.
day, IL 30 high that It drives huge |
fortunes into taK-exempt invest
ment fields with the result that |
the Government loses money. He
has proposed 25 per cent as the |
maximum-on the same theory of |
the manufacturer who believes in |
a low-priced product and great |
distribution, rather than a high |
priced product with only few to
absorb II.
President Coolidge made it plain |
that he agrees thoroughly with his
Secretary Of the Treasury, that rs
per cent on huge incomes represents
the ''saturation point" beyond
which capital viii not stay in tax
able fields, but will seek invest
ments on which it pays no taxes.
Friends Are In Minority.
Meanwhile, the friends of the Mel
Ion bill, as written, are admittedly
in the minority in both Senate and
House at this time. The Democrats
are divided on It. The Republicans
are divided on it. And the whip
hand IL held by the so-called progress
sive wings Of both parties, who IA
vor soldiers bonus, more taxes on
the rich and fewer taxes on the
smaller incomes.
This was the situation today at
the end of four weeks wrestling
with the tax situation. Neither Re-
publican nor Democratic leaders of
rank are willing to predict an out
come of the chaos that now exists.
Republican leaders devoted them.
selves today to trying to persuade
bonus leaders not to force the
WAYS and Means Committee to re.
port a bonus bill within ten days.
A conference Of bonus advocates
has been called for next Thursday
for that very object. and they ad-
mittedly have the power. to do 1t.
Republican leaders informed thG |
bonus leaders today that bonus
bill"i is certain anyway. and that for
the good Of party harmony and
for political expediency Il would be
advisable to get some action on tax !
reduction first. Benus leaders,
however. are fearful Of delay.
The Ways and Means Committee,
continued work today |
on the administrative features Of |
the Mellon bill. leaving the reduc-
ton figures themselves severely
alone.