Results

Last week the Ways and Means Committee of the House drove ahead and practically completed the tax bill which it will offer to the House early in December. The preparation of the bill was almost a record for speed and efficiency. The reason for this unusual procedure was simple; the Democrats on the Committee cooperated in drafting the bill instead of trying to oppose every proposition put forward by the majority. It is one of the few important bills in recent years aside from War measures, which the opposition party, whether Democratic or Republican, has not tried to use as an excuse for bedeviling its opponents. The credit for this achievement, so far as it goes, must be awarded to the Democrats, although the Administration forces .must share it in some degree for having made proposals which the Democrats considered it unwise or unsound to oppose as a whole.

Details. Most of the detailed decisions as to surtaxes, estate taxes and "nuisance taxes" were worked out last week. Surtaxes beginning at 1% on amounts over $10,000 and grading up to 13% on $42,000 were left the same as at present; but over $42,000 they were tapered off to 20% on $100,000 and more. Estate taxes were altered similarly in the higher brackets, beginning at 1% after a $50,000 exemption and grading up to 20% on amounts over $10,000,000.

Taxes abolished included those on jewelry, firearms (except pistols) and ammunition, mah jong sets, pipes, cameras, films, art works, yachts, slot machines, brokers, pawnbrokers, etc., deeds and conveyances.

Taxes reduced included cigars, alcohol, automobiles.

The Total Reduction. After striking off some taxes and reducing others, a calculation was made of what the total loss in revenue would be. It was itemized as follows:

Personal

Taxes Lost Revenue

Income taxes $193,574,564

Gift tax 1,000,000

Excise Taxes

Cigars and tobacco $12,000,000

Alcohol 4,000,000

Auto trucks and wagons 7,807,811

Other automobiles,

motor cycles 37,656,619

Tires, accessories 22,737,384

Cameras, lenses 653,544

Photo films, plates 8 76,735

Firearms, ammunition 3,164,124

Cigar-holders, etc 65,243

Coin machines 950,549

Mah jong sets 20,220

Sculpture, etc 821,518

Jewelry 9,673,475

Occupational Taxes

Brokers, pawnbrokers,

ship brokers and Custom

House brokers $1,326,657

Billiards, bowling 2,289,831

Shooting galleries 16,525

Riding academies 12,015

Automobiles for hire 1,865,065

Tobacco manufacturers' tax 1,125,000

Yachts 301,455

Opium license tax

(physicians) 311,000

Stamp Taxes

Deeds and conveyances 2,000,000

Grand total $304,249,334

This total does not include the reduction in the estate tax, which will not be felt for a year or two. Then it will amount to perhaps $20,000,000 additional. Nor does it include all of the reduction in the tax on alcohol, which becomes effective half on Jan. 1, 1927, and half on Jan. 1, 1928.

Such in substance is tax reduction as proposed by the Ways and Means Committee of the House.

Future Developments. Congressman John Q. Tilson of Connecticut last week began to plan for putting this non-partisan bill through the House with Democratic cooperation. Unless the Democrats change front, he believes that the bill can be considered and passed by the House between the 14th and 23rd of December, so that it can go to the Senate immediately after the holiday recess, leaving that body a good two months to pass it and yet make it effective before the March 15 payment of income taxes.

On the floor of the two Houses, and especially in the Senate, the bill will not have such "clear sailing" as it has had in committee. Some Democrats and the radical Republicans will want to have higher maximum surtaxes than 20%, some will want higher maximum estate taxes than 20%, some will want higher personal exemptions than $3,500 for heads of families, and some will violently oppose repeal of the tax publicity provision of the present law. Of course there will be modifications in the bill as now brought forward. The question is, "Will they be major or minor?"

Chairman Green of the Ways and Means Committee believes that, if the present bill or something closely resembling it is passed, there will be no new tax law for several years to come. Said he: "If business moves along on its present lines I believe the taxes we have adopted will net the Treasury a surplus of perhaps $30,000,000 by 1928. On the other hand if business has one bad year, this plan might leave the Government with a $50,000,000 deficit. The bill represents the absolute minimum for safe operation of the Government under present conditions."