Evening star., 1924-01-29
APPROVE SURTAX
OF 35 PER CENT
G. o. P. House Leaders Seek
Compromise Between Mel
lon and Garner Plans.
ny DAVID LAWRENCE.

Republican members OF the House
ways and means committee have
agreed among themselves to place
the maximum surtax rates at So per
cent. They are soliciting the ap-
proval of Secretary Mellon and Pres
ident Coolidge, and some Of the House
members think the approval will be
Forthcoming. as it is the best COM
promise they believe they can get in
the House.
Mr.. Mellon proposed 25 per cent as
the maximum, while the democratic
plan, introduced by Representative
John Garner of Texas, provides for
maximum of "A per cent.
The republican leaders have been
trying to win converts among the
democrats. particularly those VINO
represent districts with large cities
in them. the supposition 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 millstones Of
partisan rivalry.
Want Mellon Assurances.
Thirty-five per cent is better than
nothing and S5 per cent is better than
44--thats the argument being used
among the conservative democrats,
enough of whom are said to be inter-
ested in the republican proposal TO
encourage the republican leaders to
go to Secretary Mellon in order to
win his approval
Those democrats who are leaning
toward the 35 per cent proposal do
not represent majority of their
party by any means. but enough are
said to be lined up to enable the re-
publicans. with their aid, to get the
35 per cent rate through the House,
but these democrats will not pledge
themselves to vote for II unless they
have assurance that Secretary Mellon
will accept 1t and that they will be
voting for something that will really
be adopted. If the President and
Secretary of the Treasury stand pat
do not want to put themselves in the
position OF abandoning the "A per
cent rate in the Garner plan.
Mellon Plan Changed.
The ways and means committee is
already changing the Mellon pro-
posals considerably. The amendment
accepted by the committee on Mon
day. which limits the 25 per cent re-
duction on earned incomes to those
incomes of $4,000, Is not what Sec
retary 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, 80 far as funda-
mentals are concerned, but which af-
who are dependent on the work of
others for their incomes provides
that all income up to $4,000 shall
be regarded as earned income and
subject to rs per cent reduction
of taxes.
This amendment was inserted be-
cause of the widespread demand that
Congress should treat widows and or
phans and inyalidS who are support
cd by invested funds on the same
comes. The limit of $4,000, 1t was
felt. would take care of all the cases
of this kind and yet would not carry
the Is per cent exemption too far.
Thus If a trust or funds from. an in
$4,000 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 salary of $1,000
year.
But If person has a trust Of $780,
600, the annual income from which
at per cent would be $4,000. the
first $1,000 is subject to the rs per
cent reduction, but the remaining
$1,000 takes the usual tax rates.
The ways and means committee is
making rapid progress in consider
ing the bill, and the ll-im portant
question of surtax rates has finally
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