Evening star., 1926-02-20
TAX LEV|ES READY
FOR FINAL ACTION;
CONFEREES AGREE
Compromise Measure Pro-
vides for Total Years Re.
duction of 1881 600. 900.
HOUSE GAINS MAIN POINT
ON INHERITANCE CLAUSE
This Promises, However, to Become
Stumbling Block to Final
Approval.
Ey the Associated Press.

BY the Associated Press.
The revenue bill, whipped into
shape after four months of constant
work. providing for tax reduction of
1881 100000 this year. s543, 900 900
thereafter. and for many changes in
the administrative features of the
present income tax law. is ready for
its final trip through Congress.
Representing compromise on
many provisions between the Senate
and House. the bill will be taken be-
fore each branch for ratification the
first of next week. and if given ap-
proval will be sent to the White House
for the signature of President Cool
idge.
The measure will become law before
the end Of next week under this pro-
gram, it's managers believe, with many
of its provisions for widespread reduc-
tionS in taxes becoming effective i'm
mediately. The lowered income taxes
will be effective on incomes of last
year on which taxes are payable by
March 10.
House Gained Point.
Taxes eliminated by the Senate. but
restored IN conference on the INSIST
ence of the House confereeS, included
those on automobile passenger cars.
admissions and dues and inheritanceS.
While the House gained its main
point. retention of the modified in
heritance rates, with a provision for
so per cent creGlt on account of pay
mentS on State inheritance payments,
It was forced to yield to the Senate's
demand for a retroactive cut in this
tax whereby the increased rates in ef-
feet since 1924 would be eliminated in
favor of the lower rates applying in
the 1921 law.
The inheritance tax. which proved
to be the main stumbling block in the
conferences, promises TO be the sub.
ject OF renewed controversy in both
the Senate and House when the
compromise bill comes up for APP
proval. Quick agreement on other
provisions are looked for.
While the total reduction of $751;
900, 900 is 375, ,000. 900 below the amount
proposed by the Senate. it is $50, ,000,-
900 above that voted by the House.
This is somewhat above the limit set
by Secretary Mellon, but confidence
was expressed by administration lead.
ers that such a cut could be made
without danger of a Treasury deficit.
How Bill Now Stands.
The conference agreement on the
points in dispute follows:
Restoration of the modified inher.
tance tax rates voted by the House,
including the provision allowing 80
per cent credit on account of State
Inheritance tax payments.
Retroactive cut in the inheritance
tax, whereby the increased rates voted
in 1924 would be eliminated in favor
OF the lower rates in the 1921 act.
Allowance of the increased reduc-
tions in the surtax rates applying on
incomes between $26 900 and 500 900,
rs voted by the Senate. This involves
q saving Of $23, 900. 900 annually to
taxpayers in this class.
Repeal Of the capital stock tax as
voted by the Senate.
Increase of the corporation tax, now
121z per cent, to 13 per cent for this
year, and 1914 per cent thereafter.
Restoration of the 10 per cent tax
on admissions and dues. but with an
increase In the exemptions to apply
on tickets costing rs cents and less.
rather than so cents and less. as voted
by the House.
Restoration of the automobile pas
senger car tax, with the rate reduced
from to per cent.
Reduction of Gift Tax.
Retroactive reduction on the gift
tax to make the lower rates in effect
on inheritances in the 1921 law effec-
tive. This tax. as far as the future
is concerned, Is repealed by the bill
Increase from 1000 to 500 900 of
the exemption from the inheritance
tax.
While Secretary Mellon indicated
some time ago that total reduction of
$352. 900. 900 was the limit which the
condition of the Treasury would per-
NIT, Senator Smoot, Republican. Utah,
head of the Senate conferees, pre-
dicted that increased revenue receipts
this year as result of improved busi.
ness conditions would permit a reduc.
ton of 1881 900 900.
The total amount of reduction will
be lower next year. it was explained,
because the higher corporation tax will
then be in effect. Under the agree.
ment, corporation taxes paid up to
July J.. will be at the rate of 6L per
cent for the half-year, and between
July and December 80 at the rate
Of 6A per cent.
Increased reductions voted by the
Senate on the cigar taxes were ac-
cepted. but its amendment to have
discovery depletion allowances for oil
and gas wells on 80 per cent of the
gross income was changed to make
the rate 27h per cent.
The Senate amendment limiting the
Treasury to two years In which to
make assessments on tax returns was
changed to three years. Four years
is now allowed.
Many Of the vital provisions Of the
bill had been agreed upon by both the
Senate and House and were not in
conference. These included all of the
income tax schedules with the excep-
tion OF the surtax rates applying on
incomes between S26, 900 and 500 900,
and most Of the miscellaneous excise
and occupational taxes, which Will be
repealed.