Mathematics

The implications of Mr. Mellon's tax reduction scheme were brought out in the discussion which followed the proposal. No predictions were so sensational as those of Roger Ward Babson. Mr. Babson, 48-year-old statistician of Wellesley Hills, Mass., is President of Babson's Statistical Organization, originator of the " business barometers " which bear his name. Where Mr. Mellon proposed savings of tens of dollars to taxpayers, Mr. Babson calculates that there will be hundreds of dollars saved.

His argument is that the manufacturer passes his taxes on to the consumer. If these taxes are lightened the consumer will get the benefit by a decrease of prices that will save 2% of the taxpayers' income. In addition, Mr. Babson concludes that the passage of the tax reduction plan would prevent a bonus and thereby make a difference of an extra 5% in living costs. Thus for an unmarried man the calculations are:

Income Present Tax Mr. Mellon's Saving Mr. Robson's Saving $2,000 $40 $17.50 $157.50 3,000 80 35.00 245.00 4,000 120 52.50 352.00 5,000 160 70.00 420.00 6,000 240 105.00 525.00 7,000 330 150.00 610.00 8,000 420 195.00 755.00 9,000 510 240.00 870.00 10,000 600 285.00 985.00

Another set of statistics has been furnished by Secretary Mellon in answer to the argument of the radicals who say that by lowering the surtaxes 23,000 millionaires will be relieved of taxes that they ought to bear. Mr Mellon's figures show how high surtaxes drive people with large incomes to invest their capital in tax-exempt securities and so actually reduce the income tax revenue from large incomes. The figures are for incomes over $300,000:

Year Maximum Surtax No. of Returns Total Net Incomes 1916 13% 1,296 $992,972,986 1917 63% 1,015 731,372,153 1918 65% 627 401,107,868 1919 65% 679 440,011,589 1920 65% 295 246,354,585 1921 65% 246 153,534,305

(In 1921 some allowance should be made for business depression.)