The Drive Begins

That taxes will again be reduced next fall seems at the present time a practical certainty ; and, foreseeing the reduction, the Administration, last week, began a drive (which will probably continue all summer) to get the kind of tax reduction that it wants.

The two chief points on the Administration's program are :

1) Reduction of surtaxes, a reduction that will take them down to 25% maximum.

2) Reduction of Federal estate taxes far below their present 40% maximum.

This is the approximate aim. The program may well be submitted on a bargaining basis as:

1) Reduction of maximum surtaxes to 15%.

2) Abolition of Federal estate taxes.

The slogan of the drive, conceived in the form of a campaign of education, is already adopted: "Not just tax reduction; tax reform!"

Shortly after the closing of Congress, Representatives William R. Green of Iowa, Chairman of the House Ways and Means Committee, issued a statement foreseeing tax reduction -- surtax reduction in particular. Last week, Secretary cf the Treasury Mellon and UnderSecretary Winston spoke before the Bankers Club of Richmond further outlining their program.

Said Mr. Mellon: "From the 68th Congress, there emerged the Revenue Act of 1924. This Act abolished some taxes, reduced some rates and followed in the main the recommendations of the Treasury as to administrative changes. In its failure to reduce the maximum surtax below 40% and in its increase of estate taxes to a maximum of 40%, the Revenue Act violated cer tain principles of taxation which I feel to be fundamental to any sound reform of the tax system. This may be tax reduction. It is not tax reform.

". . . we are in a better position to day to make the reform comprehensive. . . . Now we are approaching a fiscal year with an estimated surplus of $368,000,000. This, mind you, is after we have absorbed the losses of revenue brought about by the 1924 Act. . . ."

The new plan for tax reduction, in detail, cannot be made out until the Treasury is satisfied how much revenue the present act will bring in. It may then be made known not as another "Mellon Plan," but be allowed to transpire as the product of the House Ways and Means Committee. In that way, the political consequences, the violent effort of party opponents to destroy anything that savored of the administration's name in the last tax bill, may be partially avoided in the new.

If the Treasury had its way, it would probably like to have reductions made entirely in surtaxes and Federal estate taxes. But of course Congress will feel that something has to be given everybody. It is quite possible that there may be no reduction whatever in inheritance taxes against which the Progressives are violently opposed. But the Treasury will doubtless ask all that it wants and a bit more, and be grate ful for whatever concessions Congress grants.