Evening star., 1929-12-04
HOUSE COMMITTEE
APPROVES TAX CUT
Measure viii Be Brought Be-
for Legislators for Action
on Thursday.
BY the Associated Press.

BY the Associated Press.
The Administrators $3.50, ,000, 900 in
come tax reduction plan was approved
today by the House ways and means
committee and will be brought before
the House for action Thursday.
This Endorsement was given after
Undersecretary Mills of the Trc 1sury
appeared before the committee and ex-
planned the proposed cut In detail.
The Hawley resolution to provide for
fiat per cent reelection on corpora
ton and normal individual incomes of
1929, on which the committee was hold
ing hearings, followed, he said, Presi-
dent Hoover's recommendations and
was approved by the Treasury Depart
ment.
Although party leaders in both
Houses had agreed to the plan, Mills
explained, the Treasury had been con-
fronted with the diff1culty of determln-
ing the business trend of the current
calendar year and of forecasting the
business trend of the coming year in
arriving at the amount Of reduction
that could be allowed.
Features Of Measure Outlined.
The features Of the measure were,
he said. that 1t limits the new rates to
one year-a' novelty in income tax
legislation in this cuontry-and that
1t gives relief to the maximum num-
Der OF income tax payers, with relatively
larger benefits to those with smaller
incomes.
The reasons for limited revision were,
ne said, the estimated surplus of 1925
OO0.000 for 1880, and the estimated
surplus Of $l23, 100000 for 1881.
These figures" he said, do not in
dicate very large margin of safety
in budgets Of over $4,000. 900 900, but
the tax reduction of $3.50 O0O, 900 which
will result from the enactment Of this
bill Is divided approximately equally
between two fiscal years.
Looked at from this standpoint, the
margin Of safety is reasonably ade-
quate. The Treasury Department feels,
therefore, that the taxpayers should
receive the benefit Of those prospective
surpluses in the form of tax reduc-
tion."
Surplus May BE Temporary.
Mills explained that Treasury sur
plus may be recurring or temporary,
but that the estimated surpluses OF
1880 and 1881, seem to fall in the
ScCOIQ Glass.
Moreover" he continued, "the prob
lem of estimating future revenue is at
tended by extraordinary difficulties ~
the present time, due to the existence
of a number Of factors the effect or
which it Is almost impossible to fore
See."
The undersecretary explained that
the Treasury had been confronted with
the "diffcult problem Of determining
what effect the recent precipitious de-
cline of security values will have on tax
which unquestionably yielded a very
large income in 1928 and for the first
eight months Of the calendar year
1929"
THE pending measure" he continued
solves the problem of giving to the tax
payer the benefit of the surplus which
seems reasonably certain In the fiscal
year 1880 without running too great q
risk Of incurring . deficit during the
fiscal year 1884,"
Wage-EarnerS Beneficiaries.
Although explaining the chief bene-
flciaries of the measure would be wage
earning and Salaried employees, he said
about 100000 would be slashed of
corporation taxes and $4,000 900 on
individual income taxes. The manner
in which to grant the tax cut to the
greatest number was through O corpo-
ration tax reduction, he added.
Corporations, relatively speaking, Mills
said, were overtaxed. and added that in
1927 they paid 24.46 per cent OF their
net income in taxes, including income
taxes.
He pointed out that persons owning
stocks in corporations were virtually
paying taxes through the corporations
at IL per cent on that portion Of their
income arising from the profits Of the
business enterprises in which they were
stockholders"
Mills presented q statement showing
the total receipts for the fiscal year 1929
amounting to S3,S4S, ,463 ,189, leaving q
surplus OF $1S4,7S7, ,035. 1t gave the
1880 estimated receipts at $4,249, ,263, 900
and expenditures at $4,023, ,601 900, with
an estimated surplus Of $225, ,58l ,534. Es-
timated receipts for 1891 were placed at
$4,225. .727 900. expenditures at $4,102,-
938, TOO. with q surplus Of 1922, ,788, ,966.
After the Undersecrectary had con-
cluded . prepared statement, Repre-
sentative Garner Of Texas, the Demo-
cratic House leader and senior minority
member Of the committee, said he had
spoken Of an uncertainty in the eSti-
mates. Mills replied that previously he
had been overoptimiStic on 1923 esti-
mates, but asserted the prospective sur
plus was reasonably adequate to provide
q margin of safety for the program.
Mills also was questioned by Garner
as to the policy of the present admins
tration. The Texan asked Mills If any
of the Government departments had
asked the Treasury how much money
remained Of certain appropriations that
could be disposed Of during the present
fiscal year.
Mills replied that President Hoover
had asked the Treasury what expendi-
lures could be made Immediately, but
that he had no information as to the
Presidents plans and asserted that so
far as he knew there had been no
change in the administrations policy.
Garner said that in the Coolidge ad-
miniStration the President had asked
the department to return all unused
amounts Of appropriations to the Treas.
ury, but that he understood the pres
ent administration had reversed the
policy and was urging the departments
Ito spend every nickel they have"
Mills answered that as far as he knew
the policy Of the present administration
was identical with that of the former,
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