The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1925-10-29
MELLON OFFERS
NEW TAX PLAN
Secretary Compromises to
Tax Rate for Man With
Small Income.
1 PCT. ON FIRST $4,000

Washington, D. C. - A new schedule
Of normal income rates was presented
to the house ways and means COM
mittee today by Secretary Mellon.
The proposal suggests a rate. of one
per cent on the first $4,000 of taxable
income, two per cent on the next
$1,000, three per cent on the next
$4,000 and five per cent thereafter.
This arrangement, the secretary
said in a letter to chairman Green,
probably would be more satisfactory"
than the recently submitted treasury
schedule suggesting one per cent on
the first $4,000 of taxable income,
three per cent on the next $4,000 and
five per cent thereafter.
Present normal rates are two per
cent on the first $4,000 or income, four
per cent on the next $4,000 and six
per cent on the remainder.
Offers Alternative Plan.
Mr.. Mellon submitted the new fig
ures not as "definite" proposal, but
as an alternative plan to that laid
before the committee in writing Mon
day. 1t really is the third tentative
outline of rates the treasury has sub
mitted, Mr.. Mellon having suggested
orally when he appeared before the
committee Monday that the rate might
be made one and one half per cent
on the first $4,000; three per cent be-
tween $4,000 and $4,000 and five per
cent for all over $4,000.
Mr.. MELONS letter reached the
committee just as it was beginning
it's fourth day of hearings on tax re-
vision, with long list of witnesses
on hand to submit their views on the
income and various other levies. The
letter follows:
"In my statement before your COM
mittee on October IL / said:
"The treasury does not propose any
definite rate, but it presents to you
the certainty that tax reform can go
to rs per cent maximum normal and
surtax without the slightest danger
to our future revenues"
"In order to insure the accuracy of
such statement, it was necessary for
the government actuary' to work out
definite schedules of normal and sur
tax rates within this limit of rs per
cent, and upon these schedules to es-
innate the probable loss of revenue.
Your committee requested that we file
the set of rates upon which the esti-
mates had been based.
Explains. Rate Proposed.
THE actuary had used the tentative
schedules which yielded substantially
the same revenue. The one originally
filed with you called for normal taxes
of one per cent on the first $4,000 of
taxable income, 3 per cent on the
next $4,000 and five per cent on the re-
mainder. The alternative, schedules
of the actuary is probably more salts
factory and should have been used.
This schedule of normal taxes is one
per cent on the first $4,000; 2 per cent
on the next $1,000; per cent on the
next $4,000 and five per cent on the
remainder.
"I desire therefore, to substitute this
alternative scredue for The first one
already filed Your committee will
work out its own specific rates within
such limits as the committee may de-
termine, and the actuary's rates are
used solely to illustrate a possible
schedule within the limits mentioned
by me.
The press has assumed that the
actuary's schedules of rates repre-
sent definite treasury proposals, and |
am writing you now to assure you that
the treasury has made no change in
the position taken in the statement
quoted above, and does not wish to be
understood to be promoting definite
rates of taxi
$3.50 Deduction Ignored.
Committee members noted that the
letter left the previously submitted
schedule of surtax rate undisturbed
and that whereas the treasury has de-
clared the schedule submitted on Mon
day to be predicated upon repeal of
the present 25 per cent deduction for
earned income, today's letter made no
reference to such repeal.
Today committee hearing began with
a protest by Representative Garner Of
Texas, ranking Democrat member,
against statements made ct yester-
days session by representatives of the
Iowa tax clubs who appeared to ask
for repeal of the federal inheritance
tax. Mr.. Garner did not specify the
language to which he referred, but
said it had constituted assaults" on
chairman Green who is himself an
Iowan. Chairman Green replied he
was not concerned.