Evening star., 1928-04-15
TAX CUT HINGES
ON AUTO LEV|ES
Sentiment for Repeal of
Sales Duty Threatens
$500, 900, 600 Plan.
BY the Associated rress.

by the Associated Ifese.
Spread of sentiment among automo-
bile industrialists for repeal OF the auto
levy is threatening the administration
position in the Senate for a tax reduc-
ton within the 5000 900 900 limit set
by Secretary Mellon.
The per cent automobile tax in
wolves $66,000000 and Mr.. Mellon said
1t must be continued. although the
House voted its repeal While most of
the Senate Republicans appear ready to
support him otherwise, the Treasury
head Is admittedly facing q hard bat
tie on this issue.
Chairman Smoot o. the finance COM
mittee. which is laboring with the
$500 600 900 House reduction measure,
declared yesterday there was tough
fight ahead If any part OF the auto tax
is to be retained.
Study Corporation Tax.
Involving such a sum of revenue.
the administration leaders realize that
II this tax is repealed there will be lit
tie hope of keeping the total cut within
the Mellon limit. To Offset 1t In part,
the Republican ma ajority may attempt
to set the corporation tax at 1915 per
cent instead OF going down 10 the IL
per cent recommended by Mr. Mellon.
The House voted to cut this 1874 per
cent rate to lll2 per cent, and the
Chamber of Commerce OF the United
States is asking 10 per cent figure.
While the Republican majority on
the committee had hoped to revise the
House measure 10 $500. 900. 900. there is
apparently break In the ranks even
there on the automobile tax, with
Senator Couzens, Republican. Of Michi-
gan, looking with favor on the auto re-
peal Democrats have announced In
favor Of the repeal, but their RANKS
likewise are not solid, with Senator
King OF Utah doubtful on the automo-
bile cut. Changes In the party lines,
If confined 10 these two switches. would
leave the situation unchanged. but
other Republican defiections are In
prospect.
Democrats Seek $500, 200. 600 Cut.
Meanwhile the committee, which has
ended its hearings on the House bill.
viii settle down next week to fight out
the differences between the Democrats,
who are urging a $500, 900 900 total cut.
and the Republicans. who are generally
behind the administration.
Senator Smoot predicted today that
the entire rate structure of the bill
could be disposed OF next week and on
that program he expects TO get the tax
measure before the Senate the follow
ing week. But even II the bill is taken
up Immediately by the Senate then,
more than week is expected To be con-
sumed In floor consideration. where
Democrats will carry their fight II de-
feated In committee
Upon passage by the Senate the bill
must go through a conference battle on
Housc and battle royal is promised II
the Senate adheres, as II did two years
ago, 10 the recommendation OF Secre-
tary Mellon for repeal OF the inher~
itance tax. The House won out then
and forced It's retention.
Asks Sl5O.0O0, 900 Limit.
Limitation of tax reduction TO $780,
900 900 was advocated yesterday on be-
half 0f the American Farm Bureau Fed
Grafton In memorandum addressed 10
the Senate finance committee, which Is
considering the pending revenue bill,
by Chester H. Gray. Washington rep
fegentaLiye OF the federation,
Industry and commerce do not need
more reduction than this" said Gray,
and the average citizen is more In
favor Of applying our income ON the
Federal debt than granting tax grattn-
ties 10 those who have ability 10 pay
taxes and ere not suffering from the
present rates"