Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-01-10
GARNER s INCOME
TAX CUT PLAN IS
BRANDED POLITICS
BY DAVID LAWRENCE
Leased Wire Service to The Journal. }
fCopvrioht 1904


WASHINGTON, Jan. 7.-Repre-
sentative Gamers plan for tax re-
vision is being. subjected to scrutiny
today by treasury experts, most OF
wnonl pronounce it a plain piece OF
politics which does not take into &C.
count the economic phases of the
tax problem.
What Mr.. Garner, of Texas, has
done, in the opinion of officials of
the administration, is to take the
taxes that apply to the greatest num-
Der OF individuals and make radical
cuts without considering the main
purpose of tax revision, namely, to
stimulate business and produce a
condition Of prosperity that will en-
able the maximum number Of per-
sons to benefit.
After reaching the 100000 incomes
and up to 100000 the Garner rates
are the same as in the present law.
On incomes above 100000 the fig
are is Al per cent surtaX plus six
per cent normal tax, a total of fifty
per cent. The purpose of the Mellon
plan is to meet an economic situation
in which the persons with higher in
comes are constantly withdrawing
their capital hon productive enter
prises that mean revenue to the gov.
eminent and are putting it in tax
exempt securities, and other things
that enable them to avoid paying
taxes to the federal government.
Flaw in Present System
Under the Garner plan, the treas
ury is not assured Of any more in
come, in fact all the statistics would
10 ind 10 hot fol
will be driven out of business if the
present rates are maintained than
was the case in preceding years.
The decline IN the number of returns
above 100000 is alarming the
treasury experts. The Mellon plan is
designed to cure this fundamental
flaw in the present system.
The situation of a man with $780,
900 income is just this: He can in
vest in productive business or he
can invest in tax-exempt securities.
1t is immaterial what tax he pays
up to the 500, 900 figure. The ques-
ton is what is he going to pay on his
income above 500, 900. He can either
put his money in a 5 per cent
municipal bond or in an investment
which will yield him 10 per cent
and get the same results from either.
Investments which yield 10 per cent
are not always sound nor are they
as easily procured as tax-exempt Sc
curities yielding five per cent. AS a
result the money will not be invest
ed in productive business and the
prosperity of the business world as a
whole is diminished and the federal
government loses the revenue it
hopes to get.
Under the Mellon plan persons
with incomes over 100000 would
find it more attractive to put their
money in business enterprises. That's
the economic problem which the
treasury thinks it paramount to
solve.
Surtax Rate Is Problem
There is no doubt that the treasury
could have proposed a plan similar
to that of Mr.. Gamers for the small
er incomes but such a scheme was
dismissed from consideration as it
doesn't give the tax payer the in
direct benefits, namely the opportuni-
ty to increase his own income
through better business conditions.
The whole fight, therefore, centers
on the surtax rates. If they are
not changed and the present law is
maintained they will continue to be
unproductive and the losses that are
anticipated as a consequence of the
prohibitive rates will have to be
made UP by revising the tax laws
again next year so as to make the
persons with smaller incomes make
UP the deficit.
The test of every plan is whether
1t will get the needed revenue and
whether it will improve business as
a whole. The Garner plan will not
get any more revenue out Of the
wealthy people-the government
might even get less. 1t will not stim-
ulate business because it doesn't af-
feet the higher surtax rates. This is
the treasury view and the next few
days will see an official statement
from the treasury bearing out these
contentious with additional facts and
figures