Evening star., 1924-01-06
MELLON DEFENDS
TAX CUT PROGRAM
HIT BY DEMOCRATS
Whole Country Hurt by High
Surtax, He Says, in Letter
to Senator CouzenS.
MINORITY CHIEFS PLAN
SHARP FIGHT ON BILL
Robinson Asserts 40 Per Cent Rate
Best to Stop Exempt Secur-
tiles Evil.

The Mellon tax program will be-
come a storm center in Congress un-
der plans of democratic leaders They
made known yesterday, that they
We're preparing for Il sharp fight
against the proposal to cut in half
the present maximum surtax rate of
so per cent and In favor of even
greater reduction in the taxes on
small incomes than has been pro-
posed by the Treasury Secretary.
At the same time. Secretary Mel
Ion made public 4 letter to Senator
couzens, republican. Michigan, in
which he renewed his arguments in
favor of q maximum surtax of S5
per cent. Mr. Mellon declared it
was not those who have the capital
who are hurt by Il system of war
time high surtaXes; that "it is the
whole country who would benefit by
It's productive use who suffers"
Senator Asks Proof.
Let US have diagnosis and cure. not
autopsy and verdict" the secretary said
in concluding his letter. which was in
II
The Michigan senator had written Mr..
Mellon that the secretary's communica-
tions on the subject of reduction in sur
taxes did not seem to contain evidence
that the reduction proposed would be
for the good of the country as a whole"
He added that legislative action in con-
formity with the surtax recommends
tions should be supported by very con-
elusive evidence" that such a reduction
would have this effect.
The soldiers bonus again was in
Jected prominently into the tax situa-
tion yesterday with the filing of for
NAL petitions for conference of
House republicans next Thursday
night to decide whether the ways and
means committee is to report bonus
bill ahead of tax legislation. For
ner service men who are memb bers
of Congress pressed their demand for
conference despite the opposition
of some party leaders to their pro-
gram. call for the conference
probably will go out early this week
Robinson Outlines Plan.
The position of Senate democrats
on the Mellon plan was outlined by
Senator Robinson of Arkansas, the
minority leader in the Senate, in an
address broadcast to the country last
night from local radio station. His
pronouncement came after a confer
ence of House ways and means COM
mittee democrats with representative
Garrett of Tennessee, the minority
leader in the House, at which a conn
prehensive program is understood to
have been worked out. 1t probably
VIII be formally announced in the
immediate future.
Senator Robinson declared that
while the proposed reduction in the
surtaX rates on large incomes was
justified. in part at least it could
not be demonstrated that % per cent
Is the one and only rate which will
diminish investment in tax exempt
securities and invite them into in
oustrlai and commercial enterprises"
FROM what evidence does it an
pear he asked, that a maximum of
40 per cent levied on incomes above
100000 will not have a similar effect
to greater degree?"
Asks Transfer of Tax.
AS means of reaching income from
tax exempt securities without amend
ing the Constitution the senator sug-
SeSted the imposition of transfer or
inheritance taxes which distinguished
between securities which have borne
their fair share of tax burden during
Inc Hecedant'S Iifatima ,pl ,.z.-...
oi the same class which have not.
senator Robinson declared that
while "propagandist influences" un-
uouoteoly are at work behind the
Mellon plan, IAN overwhelming pub
lie sentiment is behind the movement
Tor tax reduction and this sentiment
is based on Justice and sound reason"
Chairman Green of the House ways
and means committee formally an
nounced yesterday that he would
have some amendments to the Mellon
plan to offer before the COMMITTEES
which he said had been "proeressine
quite rapidly" in its consideration of
the Treasury bill. He said he ,youId
propose tax on gifts above a certain
amount, such a tax not bein. CON.
tdiHeu III tHcl III at DIil submitted by
the Treasury.
Hits Tax Evasions.
Also Mr.. Green announced that he
would seek to tighten up by amend
,nent some of the provisions of the
Treasury draft designed to prevent
tax evasion. His proposed change
would be aimed primarily to prevent
tax evasion through Reorganization of
corporations.
Among the suggestions considered
by the democratic members OF the
ways and means committee in pre-
pairing their program were those to
increase the exemptions allowed un-
married persons from $1,000 to $4,000
and also to, increase the exemption
for married men; to extend the
earned income" credit of 25 per cent,
proposed in the bill, definitely to
farmers and small store proprietors:
and to increase the range of pro-
posed nuisance tax repeats.
The minority members of the COM
,nittoe are understood to have agreed
Continued on Page 2, Column 2.)