New Britain herald., 1925-10-19
Surfaces Might be 20 Per Cent Instead of 37 Without Hurting Treasury He Says
MAKES SUGGESTIONS
 FOR MANY CHANGES


 100000 was recommended to con- gress today by Secretary Mellon. Without attempting to lay down definite schedules, he suggested that a reduction in surtaXes to 20 per cent, in place of the present S7 per cent would not cripple the treasury. This would reduce the maximum tax, surtax and normal. levied on the largest income to 25 per cent. It now is 42 per cent.
 The secretary also advocated these additional changes:
 Repeal of the eNate tax.
 Repeal of the gift tax.
 Reduction of automobile taxes by repeal of the leyies on trucks, tires and accessories.
 Repeal of number of miscella- neous taxes, such as that on works of art brought from abroad.
 Repeal of the publicity section of the income tax law.
 He opposed repeal of the tax on tickets to theaters and other places of amusement and various other proposals for amendment of the present law, including any extension in the Jurisdiction of the board of tax appeals.
 The secretary's recommendations, based on the conclusions of treasury officials that surplus of $290,0O0,- GOO is in prospect this year in fed eral revenues, was submitted to the house ways and means committee at the opening of It's hearings on tax reform.
 He made reference in his state ment to an inequality in taxation produced by the earned income ex- emption allowed ill the present law, \ but he added that if the 20 per cent maximum surtax is accepted the in- equality fostered by the clause giv- Ing credit on incomes below $10,000 as earned incomes Twill not be sc pronounced"
 The treasury secretary also re- newed his advocacy of constitu- tiondl amendment abolishing tax ex- empt securities. He observed, how ever, that the amount of outstand' ing tax exempt securities now is SC large-he estimated them at IA bill lion dollars-that the government should attempt taking away thu artificial" advantage held by thos' securities. Enactment of the pro posed 20 per cent surtax will do thu work, the secretary added.
 The gift tax was characterized b! the secretary as one of a "grea many artificial restraints and inc qualities now in the taxing law" H declared the excuse for the gift ta would entirely disappear" if the 2 per cent maximum on incomes adopted.
 Mir. Mellon told the committe that neither the tax on admission nor the bulk of automobile taXe constitute a burden on taxpayer: The government Is contributin $90,000,00O year toward road building and the automobile taXes including those of trucks, tire an acccessories, are yielding annual about s125, 100000.
 "Tho sS5,OO0,OOO might he tal en off," Mr. Mellon said but z long as the government is contrit uting the s9O,OOO,00O a year to tf roads on which these automobile run they certainly ought to pa their way"
 He warned that 1t was not well cut the receipts beyond reasonable needs. The treasury, since the wa he said, had been living partial upon capital" as constituted by r turn of the investments mal through the war finance corpor ton, repayments of loans to raj roads and sale of surplus was su plies.
 AS these sources give out" continued. "we will have to pay 0 current expenses out of revenues.
 Mir. Mellon sought to defend { trcasury's debt retirement pa which has been attacked by sor democrats in the ground that If { debt were retired less rapidly, grea r cuts could be made in taxes.
 While taking the people as whole, 1t is immaterial when t war debt is paid" he said, still, between the different classes people. the investing class holdi the bonds and the producing ella from whom a larger part of our ia IS are collected, inequality exis
 
 producers to pay the security ho CTS. It is for this reason that have sought a balance between dt reduction and tax reduction"
 Discussing the suggestion for maximum of 20 per cent, MT. Nell asserted there had been a stimu ton of business every time the s tax rates had been reduced, In th' instances, he said, there had been evident increase in tax sources the increased income "has made great part if not all of the loss revenue from the higher incomes
 Tn 1922" the secretary continu with the maximum normal ylrtaxes of 7S per cent, the to Encome collections, personal corporate, were s1,5Ol.ooo,oOo. lq23 under the act, with maxim surtax and normal taxes of 5S cent. the collections were SIS. DOC, 900. In 1924, with the 2S
 ent credit, but before the effect h reduction of surtaxes could Idected in taxable income, the
 ciions were ,sosooo,O0o.
 1e5, the first year influenced by