Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1924-01-26
COOLIDGE SPURNS
c. D. P. ADVICE FOR
TAX COMP ROM|SE
BY DAVID LAWRENCE
(Leased Wire Service to The JournaIO
lConvriobf 1904


WASHINGTON, Jan. 24.-Presi-
dent Coolidge has entered the fight
between Secretary Mellon and con-
gress on tax reduction and gives
promise of staying in it till the end.
The president has been watching
with passive interest thus far the
skirnishes between the secretary of
the treasury and various members
Of congress. all of which came to q
climax with a visit by Republican
leaders to the White House to tell
Mr.. Coolidge he must compromise.
This used to happen quite often in
past days, but congress has Eeen
taken aback by the firm response
of the chief executive. He will not
compromise the tax bill out Of
existence.
Mr.. Coolidge takes pains to make
it clear he is not standing by the
treasury proposal with respect to
every detail. He expects changes
to be made that will improve the
measure. He doesn't object to amend
ments which may represent merely
a difference Of viewpoint on admin
istratiOn of the tax measure, but he
is unalterably opposed to any change
that destroys the object of the bill,
namely universal tax reduction.
Latest Warming Significance
There is more significance to Mr..
Coolidge's latest warning to congress
than has come from the White House
in the form of a statement or utter
ance since the president read his
first message to congress. Mr.. Cool
idge doesn't expect to surrender any
thing without a battle. Some OF mis-
strongest supporters have become
panicky owe: the coalition between
the insurgent Republicans and the
Democrats and are beginning to urge
a compromise particularly in the
surtaX rates, arguing that 70 Der
cent maximum on surtaXes never
will be adopted. The Democrats have
placed the maximum at A per cent,
and the compromise talk is Of IS
per cent.
Mr.. Coolidge feels that the sur
tax rates are not matters for Doliti-
cal Juggling or compromise. He be-
lieves that a surtax rate must be
productive of revenue. He is thor
oughly familiar with what revenues
the government has been losing un-
der the hign rates, and he is deter
mined that the surtaX rate shall be
lowered so as to produce revenue.
He takes the view that otherwise
the people OF small incomes will
have to mako up the deficiency just
as they are doing today, and that a
practical way must be found to pre-
vent the enormous investment in tax
exempt securities.
Firmly Behind Mellon
Mr.. Coolidge stands firmly behind
Secretary Mellon, who has furnished
figures. based on previous years
showing that the government is get
ting less and less revenue from the
higher surtax rates. The question
of how low the surfaces should be
placed is a practical question of
mathematics Below certain point
surtaxes become productive, above
a certain figure they are avoided en-
tlrely by means of tax exempt securi-
ties.
Tnirty-five percent is in many, -
spects as useless SO far as produc-
ing revenue as So per cent. Twenty
five per cent is the mark at which
capital can be tempted to invest in
taxable securities. Mr.. Coolidge ex-
poets to make this clear to the aoun-
try when the occasion requires. He
is not saying much at present, but
the warnings he has sent out are
calculated to stiffen the backs of
his supporters in congress.
Inquiry at the White House as to
whether the president would veto a
bill which had in it a provision for
surtax rates above 25 per cent
brought the response that Mr.. Cool
idge would not undertake to fore
cast his action. On the other hand,
it was stated officially that the test
Of whether the bill would be sp-
proved in the last analysis would de-