The Washington times., 1931-12-09
MILLIONS FACE
NEW FEDERAL
TAX LEV|ES
Half Billion Revenue Seei,
BY Mellon in Added
"NuiSanCeS"


Federal taxation would be
brought back into the tax
paying field if the Administra-
tion's recommendations for in
creased revenue are adopted by
Congress.
The Administration program,
outlined by President Hoover in
his budget message, was ampli-
fled in the report of Secretary OF
the Treasury Mellon, which &C
companied Mr.. Hoover's message.
BY lowering the income exemp'
tion figures, Secretary Mellon
estimated that 100000 persons
who do not now pay taxes on
their incomes would resume do
ing so, while the institution Of
taxes on admissions, telephone
and telegraph messages. bank
checks and on radios and auto
mobiles would catch millions Of
others.
SEES HALF BILLION REVENUE
These miscellaneous or "nuis-
ance" taxes would provide the
bulk of the new taxation, accord.
ing to the Mellon estimates.
He put the revenue from these
sources at $514,000,00O annually,
as against $185, 100000 by in
creasing the income tax rates,
100000, 900 by increasing the cor
poration rates, and 100000 by
applying the 1921 rates on
estates.
Secretary Melons recommends
tions follow in part:
individual Income Tax-The
normal rates to be fixed at 2,
and 6 per cent; surtax rates
at / per cent, beginning with
incomes over $4,000, graduated
up to 81 per cent on incomes
between 100000 and 100000,
and reaching 40 per cent on in
comes in excess of $5OO,OOO aS
compared with the present
maximum rate of 20 per cent
on incomes in excess Of $780,
900.
Personal exemptions to be
fixed at $1,000 and S2,5OO with
a credit of $4OO for each de-
pendent. The earned income
provisions Of the revenue act
Of 1928 permitting larger de-
ductiOnS in respect of earned
income than were permitted by
the act of 1924 should, in my
opinion. be continue.
STILL A TAX ON FEW
"The proposed revisions would
bring back into the taxpaying
group some 100000 individuals.
Even so, our income tax law
would still remain a tax paid
by relatively few individuals.
There would be only some
100000 Federal taxpayers in
a nation of 10000, 900 people,
and of this number less than
100000 would contribute 80 per
cent of the tax.
1T is estimated that such re.
visions will result in the cOllec-
tiOn of additional income taxes
in the amount of about $685..
100000 during the last half Of
the fiscal year 1892 and about
SlS5,OOO,OOO during the full
fiscal year 1888.
CORPORATION TAXES
Corporation Income Tax-The
rates to be increased from the
present IL per cent to 1917 per
cent.
"In addition / recommend
that the exemption of $4,000,
at present provided for domes-
tic corporations with net in.
comes of $25,OOO or less, be
eliminated.
OTHER SOURCES LISTED
II recommend that additional
revenue be provided from the
following sources:
"An increase of One-sixth in
the present rates on tobacco
manufacturers and products ex.
cept cigars.
Extension of the present tax
on admissions through the re.
ductiOn Of the present exemp-
tiOn to 10 cents.
"A tax on manufacturers
sales of automobiles, trucks, and
accessories at S, 3, and 21s per
cent, respectively.
"A stamp tax on cOnveyanCeS
of realty of so cents for each
SIS 0 of value in excess Of 500.
"A tax of per cent on
manufacturers sales of radio
and phonOgraph equipment
and accessories.
"A stamp tax of 2 cents on
each check and draft.
"A tax on telephone, teIe.
graph, cable, and radio mes
sage of S cents for charges in
the amount of IA to so cents,
and 10 cents for charges in
amounts in excess of so cents.
ESTATE TAXES
Estate taxi believe that
in the existing emergency es-
tateS should contribute some
additional revenue to the Gov.
ernment.
II recommend that the pres
ent rates and exemptions be
revised to correspond to those
effective under the revenue act
Of 1921"
Except for the high rates
provided by the revenue act
of 1924, which were never act.
ually operative, the proposed
maximum rate Of rs per cent
Is the highest previously in eff.
feet"