Evening star., 1925-07-12
COOLIDGE TAX CUT
PLAN FACES FIGHT
Proposal to Reduce Surtax
and Inheritance Charges
to Revive Opposition.
BY the Associated Press.

By the Associated Press.
Another controversy between the
administration and Congress on the
method of tax reduction is impending
AS was the case last year when
the Mellon plan was rejected. sur
taxes will constitute the principal
fighting point. with the inheritance
taxes as a new element in the dis
agreement.
President Coolidge has made clear
his position that there should be
very substantial reduction in both of
these taxes. and administration lead
ers in Congress have indicated that
his program will have more cohesive
support from their ranks than was
apparent year ago.
While agreeing that some reduction
in the surtax and Inheritance rates Is
desirable, some leaders, at least among
the Democrats and the Republican
insurgents, who combined to defeat
the Mellon plan, are inclined to the
view, that. there are other factors
which should have first attention.
Opposes Nuisance Taxes.
While they have as yet had no con-
leaders are giving study to a pro-
posal outlined recently by Chairman
Couzens of the special Senate tax
investigating committee for repeal
of the nuisance taxes and of the levies
on small incomes. with a reduction
then as far as might be in the sur
tax rate from the present maximum
of 40 per cent.
Indications now are that in the
+txy.1
and legislative branches the lines are
not going to be drawn as sharply as
they were a year ago, when tax re-
duction was accomplished in the midst
of an almost unprecedented general
assault upon the administration.
When the new Congress convenes in
December the Republican organization
will find itself with a nearer approach
to an actual working majority in the
two houses than 1t has had in a
number of years. There alsa are signs
that the Democrats will be less a unit
on the larger question of policy than
they were at the time of the enact
ment of the last revenue measure.
Surplus to Govern Cut.
The actual amount of tax reduction
which the administration recommends
will depend in a very large measure
upon the actual and indicated Treas
ury surplus. Some members of Con
gress call attention that another prob
able element is that Of the foreign
debt AS the debtor countries begin to
take care of the interest on their
obligations to the United States the
load on the American taxpayer will be
lightened
Whether the negotiations soon to be
entered into by this country with
France, Italy and Belgium progress
to the point where their results can
be translated into the new tax law
remains for future determination. The
interest on these debts. If refunded
in the same terms as was the Brit
ish debt, would approximate in excess
of $500, 200, 900 annually.
When the House and Senate COM
mittees come to the task of writing
a new tax law they will have avail
able a vast store of information
gathered by the special Senate COM
mittee. This Is now being put in form
for the use of Congress and should be
ready within three months, or before
the House ways and means COMMITTEES
begins it's work.
In its investigation the Senate COM
mittee dealt exhaustively with such
moot subjects as tax-eXempt securities.
capital gains and 1essee, undivided sur.
pluses of corporations and general law
administration. Some of the commit
teemen declare the results were sur
prisinE and that the tax-writing COM
mittees will have available more valu-
able information than ever before has
been presented to them and that the
ultimate result should be a much
more scientific law.