The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-04-03
MELLON ASKS
new SLASH IN
TAX ME- ASSURE
Cut of S201,115.OO0 Urged
in Senate; Says House
Bill High.
ENDORSES AUTO REVENUE
Tells Committee Flood Re-
lief Must Be Deducted
From Reductions.

/
E% GHitcd Press
WASHINGTON April Sec
rotary of Treasury Mellon recon-
mended to the Senate Finance
Committee today a total maximum
tax reduction of $2Ol.115 900, or
$23,885,0OO below his previous csti-
mate.
If the Jones-Reid flood bill passes
and is signed, appropriations for
flood relief next year must be de-
Quoted from the tax cut, making
the total tax reduction about $751;
$4,000, he told the committee.
Mellon renewed his plea for re-
tention intact of the automobile tax
and for repeal of the estate tax,
which the House overrode last De-
cember in passing its $3.50 ,C00.000
tax reduction bill now before the
Senate committee.
Surplus for 1928 Cut
He said the 1928 estimated treas
ury surplus had been cut, S53,OOO.-
600 by unanticipated expenditures,
principally the $4,000 900 alien
property bill, and that the 1929
estimated surplus had shrunk S4O,-
10000 to about $212,00O,OO0 because
of increased appropriations for the
War and Navy Departments, United
States Veterans Bureau postal de-
ficiency and an enlarged building
program.
In addition, total revenue receipts
for 1928 fell $6,OOOOOO below esti-
mates, being actually $4,O69, 900, 900,
he said.
1T is noteworthy" he stated.
that in view of all the criticism
the March collections completely
confirm the accuracy of the treas
ury's estimate Of current income tax
collections for both 1928 and 1929. 8"
Mellon included in his recon-
mendationS to the committee a tax
revision and reduction program as
follows:
Reduction Recommendations
Reduction of general corporation
income tax rate from 1875 to u
per cent. This will mean a reve-
nue. loss estimated at $l23. OOO 900.
Revision of rates on individual
incomes of from $4,000 to $4,000
Revenue loss about $5O,OOO,OOO.
Repeal of Federal estate tax. Es-
tlmated revenue loss, $700O00O.
Exemption from tax of income
derived from American bankers ac-
ceptanceS held by foreign central
banks of issue. Revenue loss negli-
gible.
Increase from $4,000 to $4,000 in
exemption for corporations having
incomes less than $4,000. Revenue
loss, S12,0OO,OOO.
Increase from rs cents to 81 in
exemption for admissions tax. Reve-
nue. loss, 100000.
Says House Plan Ill Balanced
If flood control forces a looping
off of $20,000,000 from this tax re-
auction program, Mellon advocated
retaining the present exemption on
small corporations and the present
taxes on admissions. cereal beve-
RACES, bankers acceptance and
wines.
Mellon said the Senate could not
pass the House measure cuttingi
auto taxes without producing an
Unbalanced tax system. He said the
auto tax was an indirect levy that
yielded substantial revenue without
imposing particular hardship
He also disapproved of the House
proposal for a graduated tax on
corporations. A corporations in
come does not measure its ability
to pay taxes unless the factor of
invested capital is considered, he
said. Adoption Of a graduated
corporation tax would inevitably
lead back to the excess profits tax,
he asserted
In estimating the income for next
year, Mellon said There is moth
ing to indicate that business con-
ditions will differ materially during
the balance of the calendar year
from those which have prevailed
during the past twenty-four
months"
The secretary said the treasury
was seriously considering" settle
ment out of court Of all back tax
cases" whenever the odds on ques-
tionsof law are all against the Gov
eminent"
He said that under the present
method of compelling litigation the
! back-tax collection machinery was
threatened with complete break
down, since go per cent of all back
tax cases were appealed, with the
Government winning only al per
cent of appealed cases.