The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1924-04-11
THE TAX PLAN IN THE SENATE

In spite Of the earlier predictions that the
success of the Lougworth tax compromise in
the house meant the triumph of the Mellon
tar plan in the senate, it appears that the
Republicans were over-sanguine. Not even
the Longworth compromise has been able
to win the approval Of the senate commit
tee, and there Is strong reason to believe
that the bill finally to be reported out of
committee will more closely resemble the
Garner house bill than either the Mellon bill
or the Longworth compromise. Notwith-
standing the pomp of heraldry with which
the Mellon plan was ushered into publicity,
its income schedules have been unable to
Withstand the test Of argument, and one by
one have fallen before the onSlaaught of those
who have believed that the major relief
should be in the lower and not In the higher
income-tax brackets.
Accordingly, Senator Simmons, ranking
Democrat on the senate finance committee,
is preparing to reduce the tax on the lowest
brackets from four to two per cent, and
to make the smallest reduction on incomes
above a half million a year. The tax on
incomes Of from fifty to one hundred thou
sand year will remain approximately the
same. In the Mellon plan the reverse was
true, the smaller incomes receiving the least
relief, while the higher incomes were to be
taxed at one-half the present rate Public
approval was first caught by the announce
ment of the Mellon plan, because it proposed
It
question, the average citizen took it for
granted that his taxes would decline. AS
the Mellon plan becomes better understood
it is perceived that the great majority of
taxpayers would enjoy the smallest decrease.
The opposition of the Democrats to the
Mellon plan is not based on political grounds, \
as some have alleged. but on the purpose of
establishing in fact that distribution of tax
reduction which has been improperly claimed
for the Mellon plan.
One of the elements of weakness in the
Republican position is that their own ranks
are divided on the question, large number
Of senator's calling for a modification of the
Mellon rates. This in itself furnishes
grounds for distrust of the Mellon schedules
Yet it must not be forgotten that Mr.. Mellon
has contributed one thing of great value,
and that is the framework of tax reduc-
ton. Although the details of his plan are
to be altered, yet the main outline is being
unquestioningly accepted. Secretary MELONS
financial genius is of a high order, and his
intellectual capacity is acknowledged by all,
regardless of political cleavages. But his
stressing reductions in the higher brackets
and combining the major portion of the relief
to the smallest number, is properly objected
to. Therefore, the emphasis has been shifted
from the higher to the lower brackets with
out altering the general scheme. After its
emergence from congressional revamping it
will still be the Mellon plan in its basic
aspects -
Credit, however, must be given in principal
measure tot those Democrats and to certain
independents ID congress who braved the mi
tial storm ofttpublic approval and withheld
their acceptance of the Mellon schedules until
they had given them careful study It is
believed that their influence will have been
the prevailing one, even though plan SINH
lar to the Lonsworth compromise be finally
enacted; for the Longworth compromise is
in reality the, outgrowth Of the opposition,
have been adopted. Regrets would then have
without which the Mellon plan in toto would
been inevitableLabut too late.