Omaha daily bee., 1919-05-31
Tao Reduction Prospects
From the New York Times.


The law under which the federal taxes are
payable this year provided also for next year S
rates at reduction which will yield an est-
mated four billions, instead OF this years six
billions The reduction is from a normal rate
Of II per cent to per cent, the surtaxes being
unchanged. The expectation OF further reduc-
tons in rate will be disappointed, according to
interviews with Senator Smoot and Represen-
tatve Fordney reported in yesterdays Times,
but they hold out hopes of alienation in
methods of assessment and collection. The rea-
son that there can be no further reduction is
that the treasury needs al that the taxes will
yield. Taking the period of war finance as a
whole, bonds and taxes will yield total of
25000,000,000, and the nations obligations be-
fore July |, 1920. will reach total OF S33,00O-
100000, making $S.000000000 more needed, and
which it is thought the treasury can by COM
paratively short-term issues placed with the
banks. The only hope of reducing the amount
of treasury paper to be issued is that better tax
methods may raise more money than the
Kitchen methods.
Senator Shoots proposal is to lay profit
taxes in the method Of the income taxes nclud-
ing all profits at graduated rates, but with SIM
pllhcaton in method of assessment. he haraSs-
ment under the present law is as much in the
accounting as in the payment. The taxpayer IN
business on any considerable scale has to en-
ploy high talent to calculate his taxes. taking
into consideration capital stock, borrowed
money, the intangible assets, the valuation OF
the intangible assets, including good will and
patents, overcapitalization and undergraduates
ton" etc. The substitute proposed is to tax
all profits above the average established tor the
respective trades on an average OF hve pre-War
years. The removal of complexities and dis
ordinations and harassments through legal and
accounting nlceties would be blessed relef,
alike to the treasury and business, independ-
emily of the results on the amounts payable un-
der Senator Shoots plan.
Representative Fordney's idea of the treas
ury's necessities is that the tax yield of $4,000,
cuates that the railways will need Sl,00O,000OOO
for their deficit. and that the army and navy
will need another $l,000,00O000 to cover en-
larged pay allowances. Interest calls for 81 ESQ.,
100000, and shipping for S700,0000O0 on con-
struction account, besides losses not settled,
and there are the general expenses on the scale
of SIC 100000 even before the war. The tariff
he thinks. could be made to yield $50O0000OO
instead of mere $170000000 on imports OF
$3,300000000 On half that total of imports the
Payne law yielded $333,00O,00O, and present
rates are so low that there must be great in
crease of imports unless the rates are raised
Mr.. Fordney's position is moderate for a re-
publican, for he explicitly says that an exclusive
or "prohbtive" tariff is not desirable. He neg
1ects to consider whether an increase IN duties
would not exclude large volume of imports
Our foreign customers have been as eager
TO sell as TO Duy mere, lot the appreciation OF
their currenCes created exchange difficulties lit
tie short OF distressing, considering the exhaus
ton of their gold supply. I'VE must sell to
buy" is their cry, and the urgency of their buy
ing is measured by the degree of their hunger
They have done what they could to reduce their
imports of everything but necessities, and to in
crease their exports to us of anything we could
be induced to take And we so little SYM
pathetic or understanding of their position that
we took their action as unfriendy. and some
spoke of retaliation as though conditions were
normal. We must buy to sell, unless we wish
to see Reorganization Of international trade
rious even i'll strong position, and better
worth consideration than mere revenue, of
which there can be no lack, if we wish to raise
it on considerations of revenue rather than OF
politics or social reform. Mr.. Fordney speaks
of economy to remedy any deficiency, and with
a horror of democratic extravaganza leaving
nothing to be desired in republican. When
were republicans ever less extravagant than
democrats, and just how much of the war cost
and waste would a republican administration
have saved? Whatever the answer, there is no
prospect from either side of congress of reduc
ton in rates of the larger taxes before 1921.