The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-09
LITTLE MAN
TO Share IN
LEVY BURDEN
Hoover Mellon Plan Dips
Into Pockets of Both
Big and Small.
BY MARSHALL M'NEIL
Times staff Correspondent

WASHINGTON, Dec. 9.-The rich
ad poor alike will share the bur-
den of new taxation under the rec
concentrations made to congress
today by President Herbert Hoover
and Treasury Secretary Andrew
Mellon.
To balance the federal budget,
they suggested that the internal
revenue act OF 1924 be reinstated,
with certain specified changes. This
would increase taxes in practically
every category, lower exemptions,
levy certain sales taxes on luxuries
and necessities, ranging from autos,
trucks and radios to radio messages
and theater tickets.
The President and his secretary
estimated the new taxes would yield
$500, 100000 in the remainder of
this fiscal year ending June 80, and
S920,000,000 in the succeeding twelve
months. Both urged that the new
and higher levies be imposed for a
two-year period only.
MAKES 1OtdI Oh 0,OOOyVVU
Under the Hoover-Menon plan,
100000 persons would be brought
back into the taxpaying group, max
ing a total of about 100000.
If the 1924 act is re-enacted, the
married man who has one child
would have an exemption of $4,000
because he is a husband and $500
because he is a father. This $4,000
compares with total exemption
now for man in a similar status
of $500.
A husband, and father of a de-
pendant child, who has gross in
come of $4,000, and no other ex-
emptions or deductions, would pay
taxes on a net income of $2,100 I'M
der the 1924 act, as against $1,1OO
under the present law.
On this $4,000, under the Hoover
Mellon plan, this man would be
subject to p direct federal levy Of
2 per cent, which would amount to
$40, while under the present law
he would be subject to IL per cent
on $1,100, or $3.50. Both of these
taxes would be subject also to an
earned income tax credit Of Is per
cent, so that under the Hoover
Mellon plan, the net tax would be
$3.50, while under the present law
the net tax is 1928.
2 Cents for Each Check
In addition, this man would pay
certain taxes on things he pur-
chased, under the new tax plan.
This average man of $4,000 gross
income would have to pay $500 for
$500 auto; each check he drew
on his account at the bank would
cost him 2 cents additional; a mes
sage to relative or friend sent by
telegraph would cost him from 5
to 10 cents, depending on how many
words he used, and new tubes for
his radio, or new spring for his
motor, would cost him
the sale price, plus per cent.
Mellon estimated that these mis-
cellaneous taxes would produce
$205, 100000 additional revenue in
the six months from next January
to next June, and $514,OO0,000 in the
succeeding twelve months.
Normal income tax rates would
be fixed at 2, and per cent, Mel
lon explained, comparing with IL,
3 and per cen now.
Increase for High Brackets
Surtax rates would be fixed at l
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 incomes in excess of $780,
900, as compared with the present
maximum rate of 20 per cent on in
comes in excess of 100000.
The Hoover Mellon plan also
would increase corporation income
tax rates from IL to 1917 per cent
and eliminate the present $4,000 ex-
emption provided for domestic cor
porations with incomes of $4,000 or
less.
This, Mellon said, probably would
result in an increase Of about ST.
5000 in corporation. income tax
receipts during the last half of this
fiscal year, and about $60,000,000 in
the next fiscal year.