Imperial Valley press., 1925-10-19
Secretary Mellon
Proposes Change
In Federal LeUies
Urges Maximum Normal Tax Be Per Cent and
Maximum 20 Per Cent; Favors Retention of Tax
on Autos in Order To Pay For Roads
BY PAUL r. MALLON

Omitted Press Staff Correspondent
WASHINGTON. Oct. 19.-Secre.
tary of the Treasury Mellon, ap.
pearing before the house ways and
means committee today proposed
tax reductions Of between S250,000,-
900 and S350,00O,000 by the new
revenue law, giving assurance that
this sum can be safely spared from
the treasury.
He advocated fixing the maximum
normal tax at S per cent and the
maximum surtax at 20 per cent;
urged repeal Of the federal estate
tax, gift tax and certain miscellen-
eous taxes, declared strongly for re-
peal of the publicity provision of
the present law and asked con-
stitutional amendment prohibiting
the issuance of tax exempt securi-
ties.
Taxes on automobiles except poss-
IDLY on trucks, tires and accessories,
should be retained. he said, argu-
ing that $50 long as the govern
ment is contributing over $90,000,-
600 a year to roads ON which these
automobile run, they certainly ought
to be made to pay their way
Asks Clearing Features
Minor Qualifications in the admin
istrative features of the tax Law
were asked by Mellon, including
provisions affecting community
property and earned incomes.
1t is now estimated that tho
surplus for 1926 will come close to
$500, 900, 900 said Mellon, ''for
1927 the budget has not vet been
determined but | think that the
surplus in 1927, with revenue bas-
ed, of course, upon the present tax
bill, would be between 250 and 300,-
100000 dollars. This, it seems to
me. is figure which it is safe to
take MS the amount by which taxes
can be permanently reduced. 1t
seems to the treasury that we
should keep this figure of S230,00o,-
000 to $3.50. 100000 as our goal of
tax reductiou.''
Under questioning by Representa-
tive Garner, ranking Democrat
member of the committee, Mellon
suggested Slight shading of thelpre
sent normal rates upon small in
comes.
Plan Income Tax Cuts
Mellon said his plan contemplate
ed reductions of tax on incomes of
$4,000 or less from per cent to l1a
per cent; on incomes between $4,000
and $4,000 reduction of from to
, per cent and on incomes of more
than $1,000 from q per cent to } per
cent.
This is the first time Mellon has
indicated his intention of reducing
the lower brackets. 1t was not men
toned in his long formal statement.
Mellon did not propose any corr
plete set of rates for IL Mellon
plan as he did in the ease of the
law adopted last year. His major
theme was for d reduction of the
present high SurtaX from 40 to 20
per cent maximum. This, he argu-
ed, would stimulate business.
Regarding the proposal to wipe
out taxes on incomes under $4,000
the secretary declared:
"A man with $1,000 salary does
not carry funds in productive
investments and a reduction on his
taxes does not therefore, create adj
dItioual tax income.
A reduction in surtaX, however,
increases the amount of capital
which is put into productive enter
priseS, stimulates business and
makes certain that there viii be
more 5000 jobs to go around.
Pleads for Reform
at seems to me quite clear that
(NnnAinmnd nt, pnna fA