Fourth Edition

Last November, Secretary Mellon proposed a plan for tax reduction -- first edition. Subsequently the Ways and Means Committee revised the bill and approved it with not many major changes -- second edition. The House itself then got to work on the bill and made some considerable alterations, including the Longworth surtax rates (graded up to 37 1/2%). Then the House passed the bill -- third edition. Last week the Finance Committee (of the Senate) completed work on the bill and left it again in altered form -- fourth edition.

There will probably be at least two other editions of the bill -- the Senate version and the joint conference version.

The main features of the Finance Committee version are: P: Restoration of the original surtax rates proposed by Secretary Mellon (maximum surtax 25%; normal tax 3% up to $4,000, 6% on $4,000 and more).

P:Removal of the gift taxes imposed by the House.

P:Abolishment of the corporation stock tax and increase of the corporation income tax from 12 1/2% to 14%.

P:A 10% tax on all radio sets and radio parts.

P:A 10% tax on Mah Jongg sets costing over $5.

P:Restoration of the estate tax to the present maximum of 25% on estates of $10,000,000 and more. (The House had fixed 40%).

P:Lowering of the exemption from the 5% tax on jewelry from articles worth less than $40 to articles worth less than $25.

P:Restoration of the tax on telephones and telegraphs, previously abolished by the House.