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' ' 22 WILMETTE LIFE, FRIDAY. FEBRUARY 15, 1924 --=------------·········; Mellon Tax Reduction Plan . · I . What the Mellon Plan Is and How It Is Intended to Save Money for the Average Taxpayer EARNED INCOMES ARE ALLOWED A REDUCTION OF TWENTYAndrew W. Mellon is Secretary of the Treasury of the United States. FIVE PER CENT IN TAXES IN ADDITION TO ALL OTHER CUTS He is a banker of great ability. He is not a politician. Mr. Mellon has :MADE UNDER THIS PLAN-A proposal distinctly .in favor of the man submitted to Congress a plan, in the form of a bill, to materially redu~e t~e. with the average income. burden of federal income taxes which are a result of the war. In thts btll ..The Mellon Plan, second, places a tax he also provides for the con:tplete eliminaof three per cent on net incomes up to tion of all the so-called nutsance taxesWrong=~ and including four thousand dollars per taxes on telegraph, telephone and radio PPONENTS of the Mellon Plan in Congress are playing to year-a reduction of one .per cent-plus messages and on admission to theaters, the gallery. That is, they are loudly vociferating that ball games and other places of amusea tax of six per cent on inc,omes above they will fight to the last ditch for the ordinary man-for the ment. $4,()(X), plus a graduated sur-tax running average voter. The Mellon plan, as it is called, was from one per cent on . a ten thousand Their plaint is that the big man must pay-that the man who introduced into the House of Representhas an inc,ome of $100,()(X) to $1,()(X),()(X) per year must not be let dollar income to 25 per cent on $100,CXX> atives, which body, under the constituoff with a mere 25~ tax as is proposed by Mr. Mellon. Talk of tion, must give first consideration to all income. this kind reads well in the newspapers. But these gentlemen do matters relating to taxation, and was renot explain to the people back home that of the 7,259,944 indiHERE AGAIN THE MELLON ferred to the Committee on Ways and PLAN IS IN FAVOR OF THE AVERviduals who paid income taxes in 1920, only 15,742 reported inMeans. This body, of which twelve AGE MAN. comes larger than $50,(XX) per year. are Republican and seven Democratic, is These gentlemen do not explain to their constituents, that now discussing the plan in detail. Many The Mellon Plan provides, third, for all municipal, state and county bonds and many United States changes and amendments are being sugthe elimination of all taxes on long disGovernment bonds are "tax free"-that is, money received as gested by p.olit\cal opponents of Mr. tance telephone conversations, on teleinterest from bonds of this class are not subject to the income Mellon and President Coolidge. Every graph anci radio messages and on admistax. They do not explain that MOST of the big incomes of effort is being made to nullify some of sion to places of amusement. the country are now derived from these tax free securities and the most important provisions of the plan. pay no income tax at all and are not included in the 15,742 Opponents of the plan are utilizing mentioned above. every known political trick. They are The total savings to the taxpayers THE PEOPLE WITH THESE GREAT INCOMES AND trying to convey to the general public which the Mellon Plan will effect is $323,THOUSANDS WITH SMALLER INCOMES WERE FORCED the idea that the Mellon Plan is of much 313,(XX) per y~ar divided as follows : TO INVEST THEIR MONEY IN THESE TAX FREE SECURmore advantage to the .very wealthy class Savings to the payers of income ITIES TO ESCAPE THE PRESENT TAX OF FIFTY PER than to the average wage earner, salataxes ..................... $222,900,000 CEN~ . ried, business or professional man. Under Mr. Mellon's plan these fortunes will be put back Savings to theater patrons, THIS IS NOT SO-THE MELLON into productive industrial enterprises-it will furnish more work baseball fans, through elimPLAN WILL DO MORE FOR THE -it will mean more production-AND IT WILL MEAN THAT ination of taxes on tickets. 70,148,000 TAXPAYER AND FOR BUSINESS THE BIG INCOMES WILL PAY MORE TAXES THAN AND PROSPERITY IN GENERAL Savings on telephone and THEY DO NOW. THAN ANY OTHER PLAN WHICH telegraph and radio mesHAS BEEN SUGGESTED. sages .......... ·......... . Per-t Rd1lnla, Number Filed for Caleadar Yean lta ...d 1·11 The Mdlon Plan provide~, fir~t, that Income Classes. 1920 1919 Income Classes. 1920 1919 all incomes shall be divided into two $323,313,00) $ 1,000 to $ 2,000 ~.671,950 1,924,872 $100,000 to $150,000 2,191 2.983 classes- earned and unearned. Money 2,000 to 3,000 2,569,316 1,569,741 150,000 to 300,000 1 063 1,864 Following are tables, prepared by received for personal services in the f.orm 3,000 to 5,000 1,337.116 1,180,488 300,000 to 500,000 '239 425 the Treasury Department, which detail of ,.,·ages and salaries shall b~ classed _ as 5,000 to 10,000 455,442 438,851 500,000 to 1,000,000 123 189 10.000 to 25,000 171,830 162,485 1.000,000 and over 33 65 earned income. the savings that will accrue, under the 25.000 to 50,000 38,548 37,477 -----Money received as dividends, interMellon Plan, to the taxpayer, with in50,000 to 100,000 12,093 13.320 Total ............ 7.259,944 5,332,760 est, etc.r !'hall be classed a unearned. incomes from '$1,200 to $1,<XX>,<XX>. come. r:===WhY the Opposition Is O be se IU in or Rates on Eamed Net Incomes from $1,200 to $6,000 Siaale PeriOD Earned Net Income · Present Tax . . Saving Married Penon Without Children Married Per100 With Two Cillclr· Preaent ' Ta.x Tax Under "Jolellon P{an Tax Under Mellon Pl:J: Saving $t.zt1 ··... .... 5,Ztt S,M z.· Z,411 1,111 $ I Z4 J,%01 J,lll ~ 1M 121 . n 5I ... ·zz 3l 4.51 13 s 3.51' t· lSZ 171 Zll 117 --~------!D.&-n~~~D,M~~T7,~~~~~~~~~~--=:~· RATES ON EARNED NET INCOMES $6,000 TO $25,000 Z4l .7 7. " ISS IS · sa 41 11 17 z.t 31 38 45 No_ tax on flnt $3,300 $ lZ . 5Z 5I 17 11 $ 1.75 $ 5.Z5 za 44 liZ ts.75 z.t.75 rus M · u.7s liS S4M 11.11 a.· azs eM U.25 IZI nM lUI --------------------------~----------------------i' 1 Net Income Siqle p . .. . I· :. Net Income .t .... ..... .... .. . .... · ... .... ...... ·. ,. ... ·..... .... Pre·ent Tax ..... .,... .... , ·~ ~ Tax Under Mellon Plan · Z4l 12.111 ... · Savina Net Income 135 zzs $ 115 liS 315 1,. 1.- 175 s. .... SIS ZIS ..... .... ,.,.. .au- ~ P~ W~ Two D19tndeat ~ Present Tax Tax Under lleUon Plan Saving · $ IZI 1,5ZI 2,121 as 21- zs,· Z4- 2,411 z.- s-...r · . ..... ZMI zs.· 1.RATES ON UNEARNED INCOMES .$25,110 TO $1 081 Ill . l,IH 1.-& 1,4H Ill t5l 1,115 1,171 ,.... .... , ..... 1. . ... .,. m 151 $ 1,111 . 1,371 ,..... n .· a.· I ,I'll %,311 , ' ·' .. ... - ... .... 7Z 1oM DC ··· IU ZIZ 317 417 7.W az liZ 14'1 1,111 .. Tall Under Preaent Law .... -.. ..... .·· ,... s.al Tax UJf:! Mellon BaYinl{ Net $ I.DI 'a,nt -.m .. 31.121 . .721 I.W.7ZI la7ZI ,. - ·1;· :· ~ ' .l ·-..... I~ ll&.aa ZSI,III ... ·11..'21 , I.DI. .·.... ... . . Manietl p_.... With T._. D1p ....t a.iWna - .... -,. ... ..,. .. . ,. ... . -- .... ··..... ..... l~teome Tax Under Preaent . Law ..,,. ...... ···· ·- Tax Under Mellon PI- $ 3,411 5,711 · z.m ... I,GZ 1.5.71 ... · ... Sa vine lii.'IIC ZSI,'IIC 144,571 81.571 -.s71 511,571 ( ":"' .. .. ' -nz.· . ..... .. .,.. .... IZ,'IIC : 1,144 .. A~vertiaement .