Evening star., 1925-03-28
Future Income Taxation.


Members of the Senate finance COM
mittee and the House ways and
means committees have been request
ed by their respective chairmen, Sena-
tor Smoot Of Utah and Representative
Green of Iowa, to return to Washing
ton in September to begin work on tax
revision. 1t is good news. Good news
particularly in view of the fact that
both these gentlemen are well in
formed regarding the condition Of the
Treasury and the expectations Of
President Coolidge and Secretary Mel
Ion.
The framing Of the proposed new
tax law will lead to another contest
in Congress, If We are to rely upon
the past performances of that body
and not long past. President Coolidge
has made it clear in his public ad-
dresses to Congress and in his in
augural address that he still stands
four square with the proposal Of Sec
retary Mellon which calls for a large
cut in the upper surta1es. Mr.. Cool
tdge has said that business in this
country should be accorded q system
Of surtaxes at rates which have for
their object not the punishment of
success or the encouragement of bust
ness, but the production Of the great
est amount of revenue from large in
comes" He has said. too: I'VE can
not finance the country; we cannot
improve social conditions through any
system of injustice, even If we at
tempt to inf1ict it upon the rich"
The administration clearly has
given notice that 1t is going to the
bat once more for the so-called Mellon
plan, which looks to a reduction of
surtaxes until the maximum bracket
is 25 per cent. This does not mean
that there will not be further low
ering Of taxes paid by the smaller
incomes, too. But back of the theory
that the surtaxes must be reduced and
excess profits taxes avoided lies the
conviction that in the end the great
mass of the people, including the poor.
must pay these surtaxes and excess
profits taxes, indirectly, it Is true, but,
nevertheless, inevitably, and that such
taxes hamper the proper expansion of
business today and help to keep prices
at high level.
During the last Congress, when the
present revenue law was framed, the
Mellon plan was vigorously attacked
in the House and Senate. The Demo
Gratis opposed vigorously the slash in
the surtax rates to 25 per cent
maximum. The so-called progressives
on the Republican side were more vio.,
lent in their attacks than were the
Democrats. In the end q compromise
40 per cent-was enacted into law.
compromise between the Democratic
rates and the rates urged by the Re-
publican leaders. The Democrats
claimed credit for the rates SO estab-
lished.
In the new Congress, however. the
administration is in better position.
Particularly true is this of the House,
where the majority of the Republicans
has been increased materially and the
balance Of power is no longer held by
a group Of insurgents. The House
majority is "a net, with the insurgents
counted in opposition. Revenue bills.
under the Constitution, must originate
In the House. In this instance the
administration gains by this constitu-
t!onal limitation. The bill should
come to the Senate an administration
bill, unless all signs fail. In the Sen
ate, however, the contest will be
closer, although there will be some
Democratic assistance in the adoption
OF the Mellon plan. Senator Glass of
Virginia, for example, has been re-
ported as favoring reduction of the
surtaxes to. 20 per cent, out-Melloning
Mr.. Mellon.
The President has declared he be-
iieves one Of the most glaring defects
OF the present revenue law is the pro-
vision making public the income taxes
paid by taxpayers. An effort may be
made to repeal this provision. But
it will meet with determined resist
ance at the Capitol.