The Dawson news. (Dawson, Ga.) 1889-current, 1925-10-27
CUT SURTAX IN HALT,
INCOME TAX A FOURTH
SECRETARY MELLON SUBMITS
PROPOSAL FOR FEDERAL
TAX REDUCTION.
GIFT TAX REPEAL is FAVORED

Repeal OF Estate lax, Truck, lire
And Accessory Tax and Many Mis-
cellaneous Taxes Proposed. Warns
Against Cut of Over $500, 100000.
A tax revision program, contem-
plating a reduction of the maximum
surtax income rate of one-half and of
normal income levies by approximate
ly one-fourth, has been proposed to
congress by Secretary Mellon.
These, with other changes which
were suggested at the opening of
hearings on new revenue legislation
by the house ways and means COM
mttee, would bring about a perma-
nent reduction Of about $290,000,000
in the nations tax bill The treasury
secretary warned that it would not be
advisable to go beyond $300.000,00O
| in making reductions, on the present
outlook for the next two years. Other
proposals were:
Repeal of the estate tax, reducing
the revenue by $100,000,000 annually.
Repeal of the tax on automobile
trucks, tires and accessories, cutting
off $35,00000 annually.
Would Repeal Gift Tax.
| Repeal of the gift and number of
miscellaneous taxes, such as those on
works of art brought from abroad.
Repeal of the publicity section of
the income tax law.
The new minimum surtax rate pro-
posed was 20 per cent which would
apply on incomes in excess of $780,
1000
This compares with the present rate
of 40 per cent, effective at 100000.
The new normal rate would be ~
per cent on incomes up to $4,000, in
stead of per cent; 3 in place OF 4
per cent on incomes between $4,000
and $4,000; and in place of 8 per
cent on incomes above $4,000.
No Suggestion on Earned Income.
While voicing dissatisfaction with
the operation OF the present law al
lowing Is per cent reduction on earn
ed income up to $4,000 he made no
specific suggestion for its repeal.
Replying to questions on that point
Under Secretary Winston, speaking
for Mr.. Mellon, declared that since
this reduction had been given to the
taxpayers it would be difficult to take
It away from them Amplifying this
statement later he said that if con-
gress should decide to repeal the pro-
vision the lowest normal income rate
could be reduced from to l per cent
instead of TO ~ per cent.
Mr. Mellon went squarely on rec
ord as opposing repeal OF some of the
so-called nuisance taxes, as had been
suggested both in and out of congress.
Among these were the amusement and
passenger automobile taxes.
Pointing out that the amusement
tax applies only to admissions costing
IN excess OF so cents, the treasury sec
rotary said this tax did not seem to
be particularly burdensome and that
it ought to be retained in the interest
of the $33,000,000 revenue which it
produces.
Let Automobile Tax Stand
The sales tax on passenger auto
mobiles is estimated TO produce $780,,
100000 annually, and Mr.. Mellon told
the committee that so long as the fed
eFal government contributed more
than $9O.000,000 a year to good roads
ION which these automobiles run they
certainly ought to be made to pay
their way"
The dominant feature in the long
prepared statement which the treas
ury secretary read was the argument
for reduction of the surtaxes. He held
the necessity for such reduction
paramount, and declared it would
serve to remove the existing inequal
titles in the administration of the reve-
nue. law
1T has been the Experience of the
treasury" he said, that every time
there has been a material reduction
in surtaxes it has stimulated business
and brought about an increase in tax
able income, which has made up a
great part, if not all of the loss of rev.
enue from the higher incomes.
"A reduction of the lower brackets
in itself means no increase in taxable
income A man with $4,000 salary
does not carry funds in non-produc-
tive investments, and a reduction of
his taxes does not therefore create
additional taxable income.
Cut Stimulates Business.
"A reduction in the surtax, how
ever, increases the amount Of capital
which is put into productive enter
prises, stimulates business and makes
more certain that there will be more
/ $4,000 jobs to go around. 1t seems to
me quite clear that man with a
$4,000 job who, if married and with
out dependents, pays tax OF but
$3.50 under the present law, or man
with a $4,000 job, who, under the
same conditions, pays a tax of S37, so,
is more interested in having job
than in having his taxes further re-
duced What we mean by tax reform
IS to make more of these jobs"