The Washington herald., 1917-01-18


Will be accentuated when the controversy
is reopened, and IL the Ways and Means
Committee does attempt to raise aother
500. 10000 or so from the income tax, as
1t is now divided, this method OF taxa
ton will be subjected to greater criticism
than has been advanced at any time
since the income tax amendment to the
Constitution was ratified. The alignment
in the present Congress, however, is un-
likely to be varied from that at the last
session, for Congressman Kitchin. the
majority leader appears to have as
many sympathizers as ever with his con-
viction that the men of small incomes
who would bear arms in time OF war
ought not to have to help pay for the
cost Of developing the instrumentahties
of national defense. 1t is already pos
sfble to Indicate the position Of President
Wilson will take II Congress calls upon
him for advice. He will oppose BOND
issue, except for emergency expenses like
those of the border expedition, will not
oppose a reduction of the income tax
exemption, and will favor a gasoline tax
| and other excuses suggested by him IN
his message to Congress- December, 1913.
The President himself indicated in the
presence OF the correspondent Of the
Journal OF the American Bankers Asso-
! ciation a short time ago that he con-
| siders all OF the suggestions he made In
connection with the revenue problem In
1919 as having valid application to the
problem which Congress now faces. In
that annual message the President sa1d: :
I've are frequently reminded that
there are many millions of bonds which
the Treasury is authorized under exist
ing law to sell to reimburse the sums
| paid out of current revenues for the
construction of the Panama Canal; and
| | tn
approximately s222, 900 are now avail
able for that purpose. Prior to 1918,
SlS,6Sl,sS0 Of these bonds had actually
| been sold to recoup the expenditures at
the Isthmus: and now constitute a con-
siderable item of the public debt. But I.
for one, do not believe that the people
of this country approve of postponing
the payment OF their bills. Borrowing
money is short-siehted finance. II can
be justified only when permanent things
are to be accomplished which many gen.
erations will certainly benefit by and
which 1t seems hardly fair that a single
| generation should pay for. The objects
| we are now proposing to spend money
! for cannot be so classified, except in the
sense that everything wisely done may
be said to be done In the interest of pos
terity as well as in our own. It seems
| to me a clear dictate of prudent states
| manship and frank finance that in what
we are now, ] hope, about TO undertake
we should pay as we go. The people of
the country are entitled to know Just
what burdens OF taxation they are to
now. The new bills should be paid by
| internal taxation
Must Find the Answer.
To what sources. then. shall we
turn? This is so peculiarly question
which the gentlemen OF the House of
Representatives are expected under the
Constitution to propose an answer to
that you will hardly expect me to do
more than discuss it in very general
terms. We should be following an almost
universal example of modern govern
ments II we were to draw the greater
part or even the whole of the revenues
we need from the income taxes. By
somewhat lowering the present limits OF
exemption and the figure at which the
surts1 shall begin to be imposed and by
increasing. step by step throughout the
present graduation. the surtax itself. the
income taxes at present apportioned
would Weld sums sufficient to balance
the books OF the Treasury at the end of
the fiscal year 1917 without anywhere
making the burden unreasonably or op-
, pressively heavy. The precise reckon
ings are fully and accurately set out in
ury which will be Immediately laid be-
fore you.
And there are many additional
sources OF revenue which can Justly be
resorted to without hampering the indus
tries Of the country or putting any too
great charge upon individual expendi-
ture. tax OF cent per gallon on gaso-
line and naphtha would yield, at the
present estimated production, $1,000 600:
. a tax of so cents per horse power on
automobiles and internal explosion en-
gines. s15,OOo,Ooo: stamp tax on bank
checks. probably s1S,oO0OOO: tax of 25
cents per ton on pig iron. $4,000 900:
a tax OF % cents per ton on
fabricated iron and steel. probably
slO,0ooooo In a country of great indus
tries like this it ought to be easy to dis
tribute the burdens of taxation without
making them anywhere bear too heavily
or too exclusively upon any one set OF
persons or undertakings. What is clear
Is. that the industry of this generation
should pay the bills OF this generation
AT the same time the Administration
and Congress leaders are busying them
| selves upon the problem Of providing
revenues, they will he on the alert to
prevent raids upon the Treasury and to
effectuate desirable economies wherever
I possible. In this connection it should be
made clear that the administration al
ready has taken steps to head of the
public buildings bill, which has been
hanging over the heads OF Congress for
two years and which would involve the
expenditure of approximately $4,000, 900
upon unnecessary undertakings. The adt
ministration will frown upon any very
comprehensive rivers and harbors ap-
| preparation bill and will hold ont for the
appropriation of money only for those
waterway projects which clearly merit
the governments support 1t is expected
| to take similar attitude toward the
| flood reclamation project. which is being
| characterized in many quarters as an
| other thinly disguised raid upon the
Treasury for something like S20,0o0Oo0.
The times lend themselves to effective
efforts at economy among the Congress
members. The election period is over
| and the members who make up the pres
ent Congress do not have to face their
| constituents for two years. Thus II is
that the pressure for pork is weaker
than it was at the last session and the
public men of the nation are in meas
ure emancipated from political influences
In this wholesome atmosphere the Presi-
dent will be free to take a more vigorous
stand for economy than might otherwise
be possible. Representative Fitzgerald,
chairman of the Comrnittce on Appropri-
ations already has begun strong.