Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-02-11
Senate's SIashing ORGY More
Than Department Can
Stand, He Says.
VOTE ON BILL TOMORROW
is FORECAST BY SMOOT
500, 100000 Added to Reductions
Makes Total $125,000,000
Over Secretary's Figure.

If the additional tax reductions voted
yesterday by the Senate to the new
revenue bill. raising the total tax cut
10 more than $3.50, 900. 900, becomes
law. Secretary of the Treasury Mel
Ion today declared this would bring
the Treasury at the end of he next
fiscal year into deficit.
The Senate action. which went far
beyond recommendations by the Sen
ate finance committee and the Treas
ury Department, repealed the taxes
on automobiles and amusements,
causing a loss of revenue to the Gov
ernment far beyond the ability of the
Treasury to stand, in the opinion of
Secretary Mellon.
Mr.. Mellon indicated. however. that
he would make no formal advances to
Congress in the matter. that the Gov
ernment actuary, Joseph :. Mccoy.
was the expert adviser of both the
Treasury and the Senate. and con-
sequently the Senate was as well ad-
vised on the prospects for Treasury
deficit as officials nt the other end of
PennSylvania avenue.
Still Hopes for Change.
Secretary Mellon feels that there
still is a possibility of the Senate
changing its action of yesterday. or,
failing this, a possibility of cutting off
the threatened deficit when House and
Senate conferees meet over the bill.
The Senate, in the opinion of the
Treasury Department. has gone much
further than was justified by the
hest estimates available to both the
Treasury Department and the SEN
ate finance committee. Senator Sm"ot
had told the Senate that the maximum
tax reduction possible was about
S352 900, 900, which had been reached
yesterday afternoon when the com
mittees recomme ndation to repeal the
inheritance tax was adopted by the
Senate.
While hoping that some changes
will be made in the bill TO obviate
q deficit. Secretary Mellon today was
represented as saying briefly that II
some change is not made the Treas
ury will run into red ink.
Vote Due Tomorrow.
A Senate vote tomorrow on the tax
bill was forecast today By CHAIRMAN
Smoot of the finance committee.
The final roll call planned for to-
dav was postponed, while administra-
tion Republicans sought TO recoup
some of the revenue losses voted yes
terday by repeal of the taxes on au-
tomobile cars and trucks, admissions
and dues.
Chairman Smoot said vote tomor-
row night would assure tax reduction
BY March Is. when income tax IN
stallments are due.
In the Senate's taX-slashing orgy
last night 800 900, 900 was added to
its s352 900 900 tax reduction bill after
il had voted to repeal the inheritance
tax. =
The sudden turning of 16 Repub-
licans who first had voted against
repeal of the inheritance tax and then
Joined an almost solid democratic
lineup in wiping out the taxes on
automobiles. admissions and dues.
bv Senator Reed. Republican. Penn
svlvania, lin view of the storm.
Beats Mellon by s1e5,Ooo.ooo.
The total reduction of s452. 900, 900
nrovided by the bill at the close or
work Yesterday is Sl25.0OO. 900 over
the figure provided by the House
measure and the maximum set by
Secretary Mellon.
Chairman Smoot told the senate It's
action in repeating the automobile
Messenger car levy, involving a loss
of $40. 900 900 in revenue. will ruin
the bill" while Senator CouZenS. Re-
publican Michigan. count cred with
the charge that it was "a damna ble out
rage if you take the taxes off dead
n1illionaires and not relieve these bur
densome levies." He had fought the
provision repeating the inheritance
levy. which was approved by the
Senate. 40 to 26 with IS Democrats
and 81 Republicans favoring it.
Elimination of the taxes voted yes
terdav NAV assure return of the in
heritance tax to the bill when u
reaches the conference with Repre-
sentatives of the House. whose lead-
.rs already had served notice theT
would fight for it's return to the bill.
Repeal of this levy. and the retro
active reduction in inheritance rates
In effect since the increases were
voted two wears ago. would involve
a loss of 100000 this year, it was
estimated.
Finance Committee Oyerruled.
Repeal of the taxes Oh admissions
and dues was approved. 36 to "a, on
motion of Senator King, Democrat. of
Utah, counter TO the finance commit
tee proposal merely TO increase the
tax exemptions on so and Is cent
tickets.
Elimination of the automobile pas.
Senate finance committee had voted to
reduce from ) to 3 per cent, was ap.
proved A. to 81, while the tax on all
tomobile trucks was stricken out. 81
10 II. The House had voted to repeal
this levy of 3 per cent. but the finance
committee restored il to the bill with
a rate of per cent to obtain $4,000.
0n0 additional revenue annually.
Although the Democrats lined UP
soldly for repeal of these taxes, they
were taken to task yesterday by Sena.
tor Reed, Democrat. Missouri, for
their compromise within the commit.
tee on the surtaX rates. He declared
that by accepting the reduction in the
maximum surtaX rate to 20 per cent
for greater reductions in the lower
surtax rates you swapped injustices
for injustices with the Republicans. "
He suggested that hereafter you let
these matters be settled in the Senate
on their merits"
Roll Call on Amendment.
The roll call on the amendment to
repeal the inheritance tax was as
follows:
For the amendment:
Republicans - Butler, Cameron,
Dale, Deneen. Edge. Ernst. Fernald,
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