Last Edition?

The joint conference wound up its work on the tax reduction and turned out a compromise that, it was thought, would pass both Houses. The Democratic tit was left in exchange for the Republicans being allowed to retain their tat. Each group was given a sop such as was most likely to secure its vote.

The Bill. The normal taxes and surtaxes of the Simmons proposal (Senate, Democratic) were retained: Normal taxes 2% to $4,000; 4% to $8,000; 6% above $8,000; surtaxes beginning at 1% at $10,000 and proceeding to 40% at $500,000 and more. These rates were very close to the Longworth rates (House, Republican) and the decision was largely a formal one in order to give the Democrats credit for a finger in the pie.

Exemptions were allowed almost identical with the present rates: $1,000 for single persons (no change); $2,500 for married persons regardless of income (Senate, Democratic proposal). At present married exemption is limited to $2,000 for incomes over $5,000.

Earned income was allowed a 25% reduction. Nothing over $10,000 may be considered earned under the Senate Democratic plan, agreed to.

Deductions for capital losses were limited to 12 1/2%--the same amount as the tax on capital gains. This is one of the few important parts of the original Mellon plan retained in the final bill.

The corporation tax was retained at 12 1/2% as at present and as proposed by the House Republicans. This was a victory over the Senate Democrats who had put in a graduated tax on undivided profits.

Estate taxes beginning at 1% on amounts over $50,000 and graduated to 40% on amounts over $10,000,000 and identical gift taxes were written into the report in accordance with the House Republican plan.

The flat reduction of 25% in 1923 taxes payable this year, having been accepted by all parties, remained in the bill.

A board of tax appeals was created to be composed of not more than 28 members for the first two years and not more than seven members thereafter. Each is to receive a salary of $7,500, and be appointed by the President with the consent of the Senate. The idea of this board was Mr. Mellon's and he proposed that the Secretary of the Treasury appoint its members at $10,000 salaries--the final plan is an all-Congressional version.

In regard to the much disputed question of full tax publicity--a proposal injected by Senate Democrats --a compromise was evolved. It was decided that the name, address, amount paid by each taxpayer should be published; that proceedings before the Board of Tax Appeals in all questions involving $10,000 or more should be matters of public record, and that Congressional Committees should have power to inspect all returns and make public such as they saw fit.

The estimated reduction in revenue to be produced by the bill was $472,620,000. It was stated that new Treasury estimates, prepared during the week, enlarged this year's expected surplus from $329,000,000 to $364,055,000. Similar expectations were held forth for next year, and Senator Simmons, Democrat, expressed the belief that there would be no deficit in spite of the passage of the bonus.

The Senate. When the conference report came before the Senate short work was made of passing it. There was no opposition to speak of. No amendments were made. Three Republican insurgents--Brookhart, Frazier, Norris--were joined by Farmer Laborite Magnus Johnson and two regular Republicans, Ernst and Moses, in voting against the bill. They were the only six. The roll call was monotonous, and the bill passed, 60 to 6.

The House. Having found so little opposition in the Senate, the bill found an easy passage through the House, 376-9. The only question was the President. Would he oppose his veto? It was suspected that Andrew W. Mellon would urge him to do so. But a veto? Perhaps not even Calvin Coolidge knew.