The Washington times., 1924-02-21
TAX
RANESBREAk,
CLAIMED
House Regulars" Say They
Have Converted Some to
Mellon Plan.
By. A. o. HAYWARD.
international News Service.

International News Service.
The Democratic Insurgent coal
ition which resulted in wrestling
control Of tax reduction legisla-
ton from the Republican ma
jority in the House and the defeat
of the Mellon plan was reported
today to be weakening under
pressure from the Republican
leaders.
Regulars Claim Converts.
It was asserted that two or three
Of the Republicans who had lined
up with the coalition had bean won
over by the regular Republicans
and would go along with them IN
an effort to be made later to sub.
stitute the Mellon plan for the
Garner plan, which has been writ
ten into the bill. This opportunity
will come when the perfected bill
Is reported to the House for
passage. There were nineteen Re.
puhiicans who voted for the Garner
plan. Additional converts must be
made II the Mellon plan Is to
triumph finally In the House.
Republican leaders are using sew.
eral arguments to win the in.
surgents beside party. loyalty. They
are telling those Demanding a
soldier bonus that adoption of the
Garner plan kills every possible
chance OF a bonus because the
Treasury will be left bare. Many
OF the insurgents are strong sup
porters OF bonus legislation.
Fight on Auto Tax Cuts,
The tax was taken .up TODAY with
indications Of a number OF stiff
fights ahead on several sections
One OF the most stubborn of these
win come when the attempt is
made to repeal existing taxes on
repair parts, tires and
accessories and a reduction from
8 to 2h per cent In the tax on
trucks of two tons or less carry.
Ing capacity. The repeal and re-
ductton Of these taxes are de-
manded by the farmers. The fight
Tor this change in the bill will be
led by Congressman McLaughlin
tRepJ Michigan. a member OF the
ways ana Means committee which
prepared the tax bill. The auto.
mobile taxes yield about $3.50. OOO,.
600, and cuts proposed would re-
duce this yield to $685. 900.
Other contests will arise over Of.
forts by Congressman Frear (Rep)
to incorporate in tho
Dill an excess profits tax, a tax on
profits, and a gift tax,
and to substitute for the existing
estate tax a new and higher
schedule for such taxes prepared by
Congressman Ramseyer Rep.) Iowa.
Has Democrat Support.
Garner, the democratic. tax
leader, has announced his purpose
to support the Ramseyer estate tax
plan. 1t Is not known how many
Democrats he can carry with him.
The Democratic.I nsurgent coali.
ton on tax legislation is working
smoothly. Besides substituting the
Garner for the Mellon plan OF tax.
ing incomes 1t has written into the
bill a provision under which the
profits from stock dividends NAV
be taxed under the general income
tax rates by the simple device of
stock issued as stock
dividend from the low taxes placed
on capital assets. It changed the
earned income section of the bill.
which classes all incomes up to
5000 as earned and places $50, 900
as a maximum for earned incomes
upon which a special rs per cent
tax discount is allowed, within
Its scope farmers and small mer.
chants whose personal service and
capital are employed in their bust.
ness. Their earned income deduc.
ton win be allowed to the extent
Of 20 per cent Of their net profits.
Some Amendments Beaten.
The House beat down amend.
ments to the bill which would have
wiped out the entire capital gain
and loss section, which limits tax
deductions to 12h per cent for each
capital gain or capital loss; pro-
posing q 25 per cent tax reduction
where income was derived from in.
vestments in sanitary dwellings
and apartments for use Of the
poorer families with two or more
children under sixteen years Of age,
and deductions from income OF
moneys paid physicians, nurses or
hospital treatment.
These amendments were pres.
ented respectively by congressman
Oldfteld, Arkansas, McKeown, Okla.
homa. and Jacobstein. New York.