The Washington herald., 1917-01-18
COUNTRY FACES
GREATER TAXES
Congress Must Find Way to Meet
100000. 900 Deficit.

Congress Must Find Way to Meet
$200.0O0.000 Deficit.
THE country 10 faced by prospective
! steady increase In taxation. The ex-
| penditures of the government are ex-
psnding every year and particular en-
! phasls will be laid upon this statement
! In the next fiscal year, when expendi-
, lures already authorized, will produce
deficit of 500. 900 In the Treasury De-
| partment unless new sources OF funds
are procured. OF course, It is true that
\ the preparation of a new revenue bill
which will provide for the funding OF
this deficit and a safe margin beyond
that. as well as the additional new ex-
penditures to be authorized at this Sos
\ sion, will constitute one of the most
| important tasks to be performed by Con-
gress. There is talk already at Wash
| ington of the Congress leaders shifting
| some OF the responsibilities for framing
the new revenue measure to the shoulders
of the President and trying to prevail
| upon him to deliver a special address
setting forth proper sources for the re-
| quired new revenue" says l.. Ames
Brown, In the Journal of the American
| Bankers Association.
|
| imminent authorization do not develop
| the darkest shadow which falls across
the path of those entrusted with the task
Of seeing that the government has the
! funds necessary to pay its bills. y That
| shadow is cast by the national prohibi-
| tion crusade. Representative Fitzgerald,
| of New York, the chairman of the House
/ Committee on Appropriations, recently
predicted national prohibition and ut
tered a warning to Congress that as
soon as prohibition is adopted a deficit
of s237 900 will be created in the Fed
| eral Treasury. To quote Mr.. Fitzgerald: /:
a deficit of s237, 10000 stares US in the
face. We might as well face It. The
country Is going dry" When II does
go dry we no longer will collect liquor
| taxes. and Congress will therefore, have
the problem of raising $257 900. 900. Where
| will we raise it? VIII We have another
Payne-AIdrich tariff? You cannot for the
| life of you raise more than $3.50 900, 900
out of a tariff. Let's stop burying our
heads in the sand
New Revenues Necessary.
Mr. Fitzgerald's proenostications and
| the present financial situation of the
| government give rise to the same sort
| Of speculation and inquiry for the ser
! ious student of public affairs. 1t is q
matter of developing new sources Of
| taxation at a time when the Congress
| politicians already have wracked their
brains to locate sources which can be
| drawn upon without political danger;
| either that or turning back to the old
tariff schedules. The Democrats would
| certainly seem to be justified by the
necessities OF the revenue in drawing
more heavily upon the customs, and
| there is hardly any doubt in the world
| that they will come around to this point
| of view some time in the next four years.
1t is similarly sound to predict that
President Wilson will be in the van OF
the tariff changers and that he will
take the responsibility of recommending
to the country the hosting of tariff
! schedules. The President has declared
| his intention to wait, however until the
Tariff Commission has had an oppor-
| tunity to make a study and report upon
the effect of the European war upon
competitive conditions. This, of course.
indicates that he would welcome infor-
| nation from the Tariff Commission to
guide him In adjusting the tariff schedules
| so that in providing needed revenue they
| might furnish the business men of the
country with the greatest possible meas
| ure OF protective benefits. The Presi-
! dents views in the matter thus authorita-
| lively disclosed, coupled with the ac-
| tual demands OF the financial situation
OF the government, clearly foreshadow
| an upward revision as desired by the
nations business men
The fact that the revision will not be
reached in time to meet the deficit of
the next fiscal year inJects numerous
Interesting considerations into the reve-
nue. problem. In the first place, there
are number of Republicans who are
either Indifferent or opposed to the
minority party making an effort to or
ganize the House of Representatives in
| 1917. believing as they do that a very
| embarrassing task OF taxation faces the
party to control the next House and that
the Republicans would be better on
politically IL they could shoulder this re-
sponsibility of on the Democrats. All
men experienced in politics recognize that
parties responsible for new taxation
! levies frequently incur popular disfavor,
| and the reported unwillingness of some
Republicans to accept the responsibilities
| of the House majority has aroused some
| sympathy.
Revise Income Tax.
The fact that tariff revision at this
session is precluded by the Presidents
| mandate assures the reopening of the
fight over income tax extensions. The
difficulty of extending the income tax is
enhanced by the fact that new inroads
were made upon incomes at the last ses-
sion OF Congress. The House insisted
upon raising the rates upon incomes
| above 1900, especially upon the great in
| comes of the country, and refused to
lower the exemption. Many logical criti-
cisms were made against this taxation
policy. 1t was pointed out that such
laws tend to create class distinctions and
| arouse class feelings and that they are
fundamentally unjust in that they do not
democratize the levles which they make
Already 1t is certain that when the ways
, and means committee turns to the in
| come tax It will do so with the same
preconceived ideas. The Washington cor
respondent of the New York World has
found this out, and he asserts that in
creases will be made as follows:
"One per cent additional upon the
amount by which the total net income
, exceeds $4,000 and not $4,000; 2 per cent
pn incomes between $4,000 and $4,000:
IS per cent between $4,000 and $4,000; 4
per cent between $50 900 and $50 900: per
cent $4,000 to 100000; 6 per cent, s1OO. 900
70 St50 900: per cent $50 900 to 500 O,1O.