New-York tribune., 1918-11-13
Tax Reduction Is Secuted
by McAdoo, Who Expects
New Loan Drives
Must Double Revenue
Prohibition Will Make Big
inroad Into Receipts;
Changes Considered

WASHINGTON, Nov. lc.-Govern-
ment financial needs for years are
almost certain to run above s4,o0O,000,-
GOO annually, treasury experts estimate,
and most of the money will be raised
ty taxation. Consequently, students Of
imposed last year, and paid in June,
will not be lightened materially by the
advent of peace.
Secretary McAdoo to-day warned that
taxes necessarily would be high for
many years to pay off war debts, and
that additional government loans would
be required He did not attempt to
forecast how large the volume Of taxes
would be.
Treasury officials and Congressional
leaders in charge Of revenue legisla-
tion figure this way:
Ordinary government expenses. OF a
billion dollars a year before tf j.. WAY.
will now amount to 100000, and
for two or thr&e years after the war
may be double that figure. If the
s16,S50, 100000 of Liberty Bonds al
ready issued are increased in volume
by later loans to $25,0O0,000,0 the
interest on this sum would amount 70
ABOUT Sl,UVO,0VU,U0O year.
Interest Charges High
It probably will be the governments
policy to establish sinking fund to
pay off the bonds at maturity, which
would require $3.50, 100000 year.
These three items would make an ag-
gregate near S4,250, 900.
To offset this we It'd be nearly half
billion dollars annually from the Allies
as interest on loans, which now amount
to seven billions and are likely to run
higher, and revenue from customs and
miscellaneous sources, which last year
amounted to about s450,OO0,00o
With allowances for wide variations
IN these calculations, there would still
remain about three and a half billion
dollars to be raised from internal reve-
nue. taxes. Last year $3,643 100000
came from internal revenue, including
S2,775 900 600 from income and excess
profits taxes. This year, these figures
probably would be more than doubled.
Figures Are Not Definite
Factors which make this system OF
estimates highly tentative, officials
point out, are that the war was not yet
definitely over, SO expense, war debts,
both Of the American government to
the public, and If the Allied govern
nents to the United States, cannot now
be figured.
Reconstruction policies, yet to be for
mulated, will have much TO do with de-
termining how many existing govern
ment wartime agencies shall be con-
tinued, and consequently how high
ordinary government expenses will run.
If the schedule Of income taxes now
being framed in the new revenue bill
works out well. it Is considered prob
able that the bulk of the after the war
revenue will come from income levies,
which next year will yield probably
$1,000, ,0000 900. Excess profits probably
would automatically be abandoned after
the war. and liquor revenue would stop
# the constitutional prohibition amend
ment is ratified, and sooner with the
passage of the WARTIME" prohibition
bill.
It Is almost certain that the multi
tude OF minor taxes now levied on
transportation, insurance, admissions,
club dues, the excise taxes. stamp taxes
and special taxes on certain businesses
now yielding comparatively little reve-.
nue. and very difficult of ndministra-
lion will be Abandoned
Tobacco and estate taxes, probably
will remain, il is said Whether tar
If schedules will be raised materially
depends on future formulation Of
policy.