The sun., 1918-11-13
CUT IN TAXES
ADVOCATED AS
BUSINESS SPUR
Finances of Transition Pc
riod Occupy Attention of
Congress Leaders.
FAVOR SHORT TERN NOTES
Treasury Officials Believe
Such Certificates Will Be
Used Extensively.
FAVOR SHORT TERN NOTES
Special Despa,ch to TIE srx.

WASHINGTON, Nov. IA financial
plan to meet the transition period
from war to peace in the business
world is already assuming tentative
form here. Features of this plan at
present under consideration by Secre-
tary McAdoo and Congress leaders
are:
A heavy reduction in the tax bill to
give a spur to business, with, how
ever. a retention of the war profits.
eliminated.
At least two more large bond issues
10 bring in a minimum of $4,000. .000,-
900 and provide for a continuance of
credits to the Allies until peace is pro-
claimed.
resort to short term certificates Of
Indebtedness running from one to three
years for any further financing neces-
sary in carrying over the readjustment
period. these notes to be amortized by
surplus of taxation that will result
as the expenses and current demands
on the Treasury gradually decrease.
Favors Elastic Method.
II is believed at tbs Treasury that
the country for future financing can
resort very extensively TO short term
obligations because. unlike Great Bri-
tain, il has financed the war so far
on a long term basis. Short term
financing. IS favored by Secretary Nc
Adoo as an elastic method of meeting
expenditures that cannot as yet be
defined
A continuance OF credits to the alies
will be urgently required and even
should peace occur in the immediate
future 1t Is believed some method must
be found to continue them for at least
year. They will be necessary. 1t was
pointed out, il America is to market
her peace products abroad. The allied
countries will require great quantities
OF goods which can be paid for only
ny exchange of products or by financial
credits 1t will Be at least year be-
fore these countries can exchange COM
modlties in any great volume
The Allies will be asked to convert
their present credits, amounting TO Vs.
COO. .00o, 600. into long term obligations
with maturity dates equivalent to those
for the Liberty loans a movement said
TO be growing in certain quarters. TO
cancel these loans or a part or them as
an expression of this nations gratitude,
finds no favor with the Administration
nor is it sought 'Oy the Allies
VIII Pay Part OF Liberty Loans.
The arrangement OF long term allied
obligations with maturity dates Watch-
ing those of American Liberty loans Will
in effect amortize an equivalent amount
OF Liberty bonds.
Instead Of a tax bill OF $4,000, 100000.
the impost on the people and the indus
try OF the United States probably will
not amount to more than $500. 500 900.
The Secretary of the Treasury now has
his experts at work to learn exactly now
much money would be raised by the rev.
enue bill as revised by the Senate
Finance Committee. A report to the
committee Is not expected before Friday.
Republicans and some Democrats on
the committee are in revolt against GER
tan taxes imposed In. the pending bill
and have suggested a new plan for OBJ
tanning the amount the Treasury deems
necessary 10 DE raised from taxes,
In brief the alternate plan n to i'm
rose a war profits tax OF so per cent.
oN the income of corporations In eN-
cess Of the average profitS yearly from
1909 to 1918 inclusive. with the Njpula
lion that corporations capitalized at
more than $500,00o must pay tp per
cent. on their present income In .extess
OF 10 per cent Of their capitalization.
This tax would bring $4,000, 100000.
Would A<eid stamp T..e..,
Leaving undIsturbed the taxes on the
normal incomes OF Individuals and cor
rorations that tax would raise $4,000
600, 900. A tax of l per cant on all
retail sales is proposed by Republicans.
and this. Treasury experts estimate.
would yield 1880, 100000. After eiimi-
Mating most Of the other taxes In the
revenue bill as II passed the House. the
oll would still bring In $4,000 900, ,o0o
according to Republican members OF the
Finance committee.
Democratic members Of the cepgInittee
are said 70 be ready to accept the per
cent. tax on sales In lieu Of MANY OF
lie stamp taxes. special taxes and So
called luxury taxes included In the
measure as II passed the House.
Partisanship has entered into consid-
sistion Of the proposed law to raise rev.
enue to help pay war expenses. Accord
.ng to the forecasts OF Republicans Al
loast ss.ooo. 100000 in taxes will be
reeded 20 pay the one-third charged to
taxation for discharging the liabilities
---------- 900