Evening star., 1928-04-03
MELLON NOW SETS
/ S2Dl,O)0,OlOL|M|T
7 ON TAX REDUCTION
1920, 600, 900 Slash Voted by
House Must Be Pared,
Secretary Says.
REPORTS TO SENATE
FINANCE COMMITTEE
Suggests Auto Tax Be Restored to
Bill-Stresses Increased Fed
eral Expenditures,


The 10000, 900 tax reduction voted
by the House must be pared down to
$2oi 100000 and perhaps to SlS2,0oo.-
600. Secretary Mellon told the Senate
finance committee today in reporting
on the outlook for the Treasury for
the next year
This is even less than the Treasury
Secretary proposed TO the House .aSt
FAN and is necessary, he explained. be-
cause OF Increased Government ex-
penditures rather than due to any drop
In revenues. which are expected 10
equal last years on the basis Of frst
returns. The first administration pro-
posal was for a s225,00o.0o0 cut
To attain the $2o1 ,000.0 900 limitation
Mr. Mellon suggested 10 the conni,0e
per cent which was repealed by the
House. be restored 70. the bill. saving
S66 600 600. and that the existing lS's
Der cent corporation levy be reduced
onlx 10 IL per cent rather than to II L
per cent. as voted by the House. Inc
rorraittee began work today on the
House bill. passed before Christmas.
after waiting for the March ID returns
Proposes Program.
The Secretary proposed this pro-
Downward revision of sIrtax rates
Applying on incomes between $4,000
and s75.oOe--loss in revenue sSO'eOO'-
coo. -.
Reduction of corporation tax from
49, 10 IL per cant-ioSs, $l23.OOO .0OO.
Reueal Of Federal estate taX-loSS,
FIRST year. s7.0O0.0O0.
Eyemnticn of inooue derived from
American bankers acceptances held oy
foreign central banks OF tssue-loSs
Re also accepted the following House
pgr1s Irc-ease from $4,000 to $4,000 the ex-
empticfls allowed corporations WITH m
zones not IN excess Of S25,0OO-ioSs.
I.srresse from rs cents to- 81 ex-
.rarAfnns on admission tax - loss,
Repeal OF tax on cereal beverages
Reduction in tax On winss-loss'
Tl.is urogran Hould result in q loial
cut 81 S10f,ii5.0oO But more gioon1y
picture was painted On the connisson 1
that expenditures VII oe necsssaLs psNe
ieei<istio1 which already has passed the
sssrnFS l,v unanimous vote, II S50'-
ara f,f0 al,urcuriatsOl for this IS neces-
ssTv nexT year, Mr.. Melon said tn2
to+el tay would have 70 be limited 70
s1s2. .000.000
would Restrict Bill.
Under these circumstances ne wonlo
restrict provisions Of the Dill 10 fecuC-
tors Of the corporation TAX Ano Iaie
rates on Surtaxes applying on nteInaeuls
ate incomes, repeal Of the estate "a. any,
cereal beverage levy and re0uctaon OF
the wine tax -.
riete oyeYnauling OF the House pill,
14.sct, took no cogniz2nce OF previous
.rrezsarrv recommendations for repeal OF
the estate tax and reduction OF lne IN
termediate surtax rates.
Tnpv would wipe out the House pro-
r,osaI for 4 graduated scale OF rates on
rorroraticrax with incomes Of $4,000 or
les and also would prevent any cul ~
Ia. present 10 per cent tax on ciup o.ee.
Instead Of a decrease IN incoine a.
quarter returns this year, eSumateo tnat
frs 10th this year anE next. these COL
fections would be 5000 900 more tnan
ORIGINALLY estimated Similarly, ne re-
TSsed rreytous estimates TO calculah
on $40 900 900 more next year IN Dack
tar collections.
But an increase Of $4,000. 900 IN
prospective expenditures Tor nexL year
Is where the trouble comes. the 5ecre-
tary explained The increase &C
ngafnted for by additional appropria-
tso.1s for the Veterans Bureau. Navy
and War Deps rtrnents postal deneiency
and an enlarged public building pro-
gram.
500, zoe 900 Surplus.
us estimated the surplus for this fis-
esI year ending June 30, at s400, ,00O.O
ard for next year s2i2 900 900, as COM
t,sred With estimates Of S454 .00c. 600 ano
s2T1 COO COO respectively, made last Oc-
tober On the basis Of the latter es1-
mates the tax cut Of s225 900 900 was
recommended 70 the House last FaA.
While estimates on receipts for next
year we're revised 10 calculate decreases
of SIS yO00, 900 IN customs collections ano
SO 5<6y0 600 In miscellaneous internal
revenue, these we're Offset by proSpec-
tlye increases IN income TAX and nscE
tsE receipts
Income tax receipts for March this
wear amounted 20 $50 065S 800, COM
pared with S5l1 y4G1, ,432 a year ago, In
nscHttnR no apparent change IN collsc-
taons from this source for this year
Last year ended with O surplus OF
more than eGO0, 600 .o00 and the drop
In the estimated surplus for tiais year IL
accounted for largely by one item, ttse
RDpfopEiaai0n Of $50 900 900 required ny
the recently enacted bsll authorizing
settlements Of American and German
Ir, urging restoration Of the present
automobile levy Of per cent, Mr, Mel
Ion declared the ilIglEtent demand Tor
repeal Of this tax does NOT come from
the automobile purchasers but from lhe
manufacturers and dealers, VINO have
oKganize1 an intensive propaganda arld
of necessity Do mt look at our tsE
problem ~aE q whole. but concentrate
iIeiy. asIenttOn on tiae one t&s which
tfasy believe affects their own interests.
Attacks Repeal.
Tax revision on the basis Of meeting
the demands Of special interest" he
ssid, Inevitably leads 10 serious nlslad-
justnAents of the burdens. A. matter
Of principle, IL Il cifilcui " justify the
repeal Of this tax. Leyied st q low rate,
II imposes no particular hsrosbtps yet
by reason Of the broad base on which II
rests, IL produces substantial income
The cost Of Our Federal Government IL
already borne 70 very large extent in
deed, when We consider the size ~ our
Population, BY the comparatively small
number that pay direct taxes. A fur
tnsr material reduction In indirect
tsAss all produce 9 very ih-bslsnced
- Nfs1sn S4ss5seI fsFs mage 19 column III