The Washington herald., 1918-05-06
WAR REVENUE
TAXES BRIDGE
OF LOAN GAPS
Third Liberty Drive Over,
Next in Fall; Taxes
Meantime.

The Third Liberty Loan drive has
been brought TO a successful issue and
the fourth will not come until fall. In
the meantime the war Golfers of the
United States will be filed for the
moment by war revenue taxes.
What these taxes will amount to is
still a matter of wide difference among
experts, both of the Treasury Depart
ment and in Congress. 1t seems GER
tain that the yield will reach at least
$3.5O0, on, 900. Senator Pomerene. of
Ohio, says that it will be more than
$1,000 OOO 600. Senator Smoot, of Utah.
says 5000. 600. 900. and Senator Smoot
is held to be a tax expert in Congress.
Further Taxes Inevitable.
No matter whether it Is $4,000. .0OO. coo
or 5000, ,OO0, 600 it will be clear money"
the kind of returns to the Treasury
which will eventually pay of the war
debt being built up by liberty loans.
and will form the basis for further
legislation by Congress for still heavier
taxation.
II Congress decides that politics at
home demands attention from July l
until December /. and should decide
to take a recess for that period. the
new war revenue legislation will prob
ably be postponed and there may be
the same delay and long deliberation
that marked the passage of the act
now in effect.
The question OF what proportion OF
war expenditures shall be covered by
bond issues and what proportion by
tax receipts. which loomed big at the
beginning of the United States part
in the war, is making no disturbance
now. Some of the radicals in Congress
declared hat the entire current ex-
penditure of the war should be met
by taxes on wealth. The more con-
servative argued in favor of a fifty
fifty basis OF meeting war costs, but
in the great demands that followed
the entry of the country into the war
the policy of get the money and let
the ratio take care of itself was forced
upon the country and the adjustment
according to the best rules of political
economy will come later.
Military Budget n Key.
The military budget Of $4,000, ,OOO, 600
for the War Department alone, just
presented to Congress, gives the key
to the tax raisers of Congress on how
they must revise their figures and the
taxes If they expect to keep a reason
able ratio between tax receipts and
bond issues to meet war expeditures.
Congress also faces the fact that
taxes must pay the bonds, and that
the quicker the war debt is paid the
better 1t will be for the country and
the part it will have to play in the
reconstruction of a world half de-
stroyed by the greatest of wars.
Informal conferences are being held
almost daily among members of the
Ways and Means Committee Of the
House and of the Finance Committee
Of the Senate, and between Senators
and Representatives and Treasury Of
ficials on how best the needs for new
revenue legislation can be met by
Congress. The. force Of opinion ap-
pears to favor an entirely new meas
ure which can be. trimmed to meet all
demands for the war and postwar
period. Some Of the trainers of the
present act contend that it can be
further patched up tosmeet the needs
Of the hour.
Eliminate Normal, Taxes.
The first effort of the experts In
Congress and in the Treasury De-
partment will be to get rid Of the So
called normal taxes. To keep these
taxes In, and pile other taxes on top
of them. on the ground that the coun-
try 10 soon to return. TO the normal"
basis Of taxation, is regarded as a
political absurdity, and simply, to
! icomplicate legislation and the ad-
ministration Of the law