Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-01-03
FEW TAX CHANGES
LIKELY IN SENATE
Surtax Lower Brackets and
Admission Tax Taken Up
by Mellon and Smoot.

BY tho Associated Press.
General approval of the House tax
reduction bill. with some modifica-
tons, was given yesterday AT con
ference between Secretary Mellon and
Chairman Smoot of the Senate finance
committee, which will start consider
alton of the measure on Monday.
Plans were discussed, however, to
rearrange the income surtax schedule
so that some reductions might be
made on the lower brackets while re-
tanning the maximum rate of 90 per
cent. as approved by the House.
Other changes con.;dered at the
conference were proposals TO increase
the exemption from 80 cents to 81 on
admission taxes and to eliminate the
reduction in the alcohol tax.
Secretary Mellon Will present his
views on tax reduction to the Senate
committee at its opening session.
Brief hearings are planned by Chair
man Smoot, who said that the only
parties expected TO appear would be
representatives of the special Senate
committee which investigated the In
ternal Revenue Bureau, who will pro-
pose some changes in the admins
May Become Law March /.
Every effort will be made by SEN
ate leaders. it was announced yester-
day, to facilitate early passage of the
bill SO that ii may become law by
March /. The measure provides for
far-reaching reductions in income
taxes, applicable to incomes of laet
year, on which first installments Of
taxes are due March 10.
Senator Curtis of Kansas. the Re
publican leader, said he saw 10 rea-
son why the bill should not be acted
upon by March /. Senator Smoot
said he expected to have the hill be
fore the Senate by January 20 at the
latest.
There have been no indications thu.
the bill. passed as non.partisan
measure by the House. will be sub
Jected to an organized party fight III
the Senate. Some Democratic Sen
ators, including Senator Simmons OF
North Carolina. ranking Democrat on
the finance committee, would go
further in the amount of tax reduc-
ton than provided by the bill, but no
specific plan has been prepared.
Surtay Rates.
Senator Smoot announced after the
]
change is made in the surtax rates it
would be almost negligible While the
House bill did not provide for any re-
ductions in the surtaX rates on in
comes between $4,000 and S44 1000, the
committee chairman declared taXpay-
ers with these incomes actually bene-
fitted considerably by the reductions in
normal rates, the increases in per
sonal exemptions and the increase In
the amount of income to which the 25
per cent reduction for earned in
come" might be applied.
The Utah Senator did indorse, how
ever, an increase in the exemption on
admission levies. but warned that the
total tax reduction must not be in
creased He said the bill actually al
lowed an annual cut in the Federal
tax receipts of 1898 10000 instead of
1925 .000, 900. as estimated by House
leaders. He attributed the difference
to the fact that the modified inheri-
lance rates would cut down revenue
from that source more than at first
anticipated.
Alcohol Rates.
To make up for the proposed
changes in SurtaX and admission
rates, Senator Smoot took under con-
sideration with Secretary Mellon the
duNlSdD luly VI leSlol liS llie pi eSelll
alcohol tax rates. The House voted
to cut this rate by % per cent a year
from now and an additional rs per
cent the following year. The whole
sale drug manufacturers are fighting
the proposed reduction, arguing it
will stimulate patent medicine bust
ness and bootlegging in alcohol. The
present tax is $500 proof gallon.
Considerable time is expected to be
given to the proposals of the Internal
Revenue Bureau investigating COM
mtttee, headed by Senator Couzens,
Republican, of Michigan. Divided re-
ports from the committee are in pros
pect, however. The majority of the
committee is expected to ask for
tightening up of the law with respect
to the clauses on depletion and mine