Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1926-12-03
Tax Reduction Plan.

A tax reduction plan which would benefit
all taxpayers from $3.50, 900 900 to $780,
100000 has been agreed upon by Demo-
cratic members Of the House Ways and
Means Committee as a substitute for the
Coolidee-Mellon plan providing for a IS
per cent rebate. which wouldn't give any.
body any real benefit except the large
income taxpayers and the big corpora
tons.
The Democratic program, as announced
by Representative John N. Garner, rank
ing minority member Of the House Ways
and Means Committee would:
]. Reduce the corporation tax from IS l.2
per cent to at least II per cent and, IL pos
slble, to 10 per cent This would BRING
about decrease in revenue of approx
mately $220.000.OOO with an II Der cent
reduction and about $l00.OOO.OOO more
under 10 per cent reduction.
z. Repeal the 8 per cent auto tax and
other nuisance taxes, such as on moving
picture admissions and club dues, amount
ing to decrease in revenue of around
$i05. 100000.
). Reduce taxes on personal incomes
between $4,000 and 10000 by $22,.
100000.
=. Reduce taxes on tobacco, particularly
leaf tobacco. by $5,0OO,0OO.
These four proposals, il was said. were
agreed upon at a conference between
Representative Garner and Senator Furni-
fold M. Simmons, ranking Democrat of the
Senate Finance Committee. They are up-
derstoood to have the unanimous support
OF Democrats on both committees.
The reductions proposed by the Demo-
Gratis are justified by the monthly receipts
at the Treasury Department. which indi-
cate. according to Democratic economists.
a $500.000.000 surplus at the end of
next June. In this connection ii is pointed
out that Republicans invariably have un-
derestimated Treasury surpluses, while the
Democrats have yet to overestimate one.
The corporation taxes were increased In
1924 from 10 per cent to IL l-2 per cent
and in 1925 from IL l-2 to IS l-2 per cent.
About 70 per cent Of this tax is passed
on to the consumer. Therefore. 1t is held
that the average taxpayer would be the
chief beneficiary from such a cut.
Every man. woman and child in the
country. 1t is pointed out. would benefit
from the elimination Of the automobile and
nuisance taxes.
In the case Of those with incomes be-
tween $4,000 and $4,000, il is argued
that they are entitled to a cut, since they
got comparatively small relief in the last
revenue bill. The reduction in the tobacco
tax Is designed primarily to aid the tobacco
grower
The proposed cut in corporation taxes, it
Is generally conceded, would be OF espe-
cial benefit to the smaller corporations. In
many instances, it is pointed cut. COM
petition Is so keen that they are unable to
pass the tax on to the consumer Whereas
the larger corporations. many of them en-.
ioyine monopoly. are in a position to
force consumers to pay their entire taxes
Another handicap under which the smaller
corporations labor is that where they are
in competition with partnerships, they
must pay twice the taxes paid by their
competitors.
Under the Coolidge Mellon rebate plan
the average taxpayer would benefit to the
extent Of less than So. The big corpora
lions. II is estimated, would get more than
70 per cent Of the total refund. A large
part OF their taxes already have been
passed on to the consumer.
When 1t is shown that average citizens
would get the short end Of the Admins
tration plan, but by far the biggest slice
cut Of the proposed Democratic tax mellon,
IL is no wonder that the White House
Spokesman is showing signs Of getting
cold feet II wasn't surprising that at the
last White House conference he indicated
he would pass the buck up to the Admin
istration followers on the Ways and Means
Committee.