Again, Taxes

Having added up March tax payments, scrutinized Congress' appropriations to date, and talked the matter over with President Coolidge, Secretary Mellon last week went before the Senate Finance Committee to announce what he thought should be done with the Tax Bill. The Bill which the Committee had received before Christmas from the House provided a tax reduction of $289,000,000 or 64 millions more than Secretary Mellon recommended last autumn.

Secretary Mellon's new points were two: 1) $201,115,000 was the maximum reduction he now could recommend; 2) $182,000,000 would be the maximum reduction if Congress should appropriate $30,000,000 for flood-relief*--an item not yet budgeted. His points made, Secretary Mellon departed for Bermuda, taking his son Paul Mellon and five of Paul's undergraduate Yale classmates.

The Senators hemmed, hawed and set to work to see what they could do with Mr. Mellon's suggestions. Soon the Democrats announced that they would continue fighting for a tax reduction of $300,000,000 at least. Senator Smoot replied for the Conservative Republicans that $187,000,000 was about the right figure.

The Irregular Republicans thus became the fulcrum of another Senate seesaw, and the tax fight changed from a question of total reduction to several questions, on what reductions shall be made.

The Irregular Republicans favor retaining the estate tax. Secretary Mellon and the Regulars want it repealed. The Irregulars dislike the automobile and admission taxes, which the Regulars oppose repealing. The Irregulars view askance reductions of taxes on corporate incomes and on individual incomes in the "intermediate" ($14,000 to $75,000).

The chief desires of the Democrats are repeal of the estate tax, and lowering of the corporate income tax from the 13 1/2% now levied to 11%, instead of only to 12%, as recommended by Secretary Mellon.

With so many desires conflicting under the elms of the capitol, a tax deadlock seemed not unlikely.

*Thirty million dollars was the Administration's figure recommended for the first year's installment of the $295,000,000 Flood-Control program drawn up by War Department engineers.