The New York herald., 1920-12-06
REVISION OF TAXES
ONE OF PROBLEMS
BEFORE CONGRESS
Cut in Expenditures Also
Needs Attention at
Short Session.
SEEK MORE REVENUE
Must Provide for Retire
ment Of Victory Notes
Due in 1923.
RECEIPTS MAY SHRINK
Any Surplus Will Be Used for
Sinking Fund-Billion
Off Appropriations.
RECEIPTS MAY SHRINK

Special Despatch to THE New YORK HERALD.
WASHINGTON. Dec. AN increased
revenue through taxation the burden
OF which shall be more evenly dis
tributed than at present and rigor-
Gus curtailment of expenditures
through processes of reduction and
elimination must be the immediate
objective of the Congress in the short
session which opens tomorrow.
Efforts toward this end are expected
10 be started without waiting for the
special session which President-elect
Harding viii call soon after March 4
next.
major revenue bill during the short
session Of Congress is almost with
out precedent. But In the opinion Of
some who agree with President VIII
sons arguments urging immediate tax
revision 1t is not impossible.
However, there appear innumerable
difficulties The debates on the regu-
lnr appropriation bills may consume
the entire period Of the short session.
Should this prove to be the case 1t will
involve, in the opinion of many legis-
lators here, the urgent necessity of
making such revenue legislation as the
new Congress must pass after next
March retroactive in it's effect, and
applicable as Of January /, 1921.
speedy Revision Needed.
For the average taxpayer better TO
understand the fiscal problems that con-
front the nation it should be borne In
mind that the Governments fiscal year
begins on July ! and ends on June 80.
II is always referred TO as the year in
which II ends. Now we are In the fiscal
year OF 1921. But the more important
Of the Federal taxes. sucn as income and
Excess profits, are levied against the
calendar year. and the proceeds divided
between the revenues OF two fiscal years.
An investigation OF the Governments
financial condition by THE New YORK
HERALD, as revealed by the funded and
ioating debt. together with the estimates
of revenues and expenditures for the
next fiscal year, indicates the necessity
COR immediate tax and tariff revision
nut not reduction. In other words. the
not because Of debts to be reduced. per-
nit OF any reduction in revenues during
he next few years. or at least until pro-
,'ision Is made to retire the Victory
totes and War Savings Stamps which
nature in 1929.
As preliminary to any consideration
# the estimates Of revenues and expen-
lures for the next fiscal year, as sup
lied by the Treasury Department and
survey Of the latest available figures
= the national debt is appropriate. The
ross debt as of November 80 last was
2f.175. 5.156.244. The more important
ems of this total are
liberty bonds. .si5 2ss, 1872 s1s
victory notes. ............... 422I ,U23 BOB
csasaTy csrtifiestss: :........ 2.zs7 7sss. 40
,her government bonds told
'7sueD ..................... 622,ls0
To Retire Floating Debt.
~ the total debt mentioned above
-.'57, ,48. .450 at present represents the
rating debt, which must be funded or
Tired within year. The plans of the
fcasury Department are for It's retire.
cnt. But In addition the Victory
ttes and War Savings securities fall
in 1873. II the new Administration
heres TO the plan of the present and
rtinues the sale OF thrift stamps the
w sales may provide for the retire.
ent of the 1918 issue. But within the
iaw of Secretary OF the Treasury
st year viii constitute a new item in
he floating debt. Sound financing calls
or the retirement of n major portion
sl this issue at or before maturity.
Consequently to accomplish these ma
sr operations with the public debt some
linking fund provision must be made
s.hch will give the Treasury an excess
II several billions of dollars In receipts
above the ordinary requirements for
government expenditures.
Secretary Houston Is known to hold
he view that any attempt to fund n
substantial portion OF the floating debt
during the Immediate future through n
new Government loan would only az
gravate business and economic condi-
lions already In need OF relief.
In this connection the tentative report
OF the tax committee OF the National
Industrial Conference Board, which re-
Gently has completed an exhaustive sur
vey OF the situation. says:
"a Government bond issue Of such n
ubstantial amount (sufficient to fund
ihe floating debit would still further
add to the difficulties which now stand
III the way of securing necessary capital
Two enterprises"
II Is pointed out that such a loan
would have to be in an amount In ex-
,,rs Of the First Liberty loan. and
here exists now neither the enthusiasm
nor the organization TO float such an
offering. Furthermore. what authori-
rcs regard as the inevitable failure or
such q plan would tend still further to
reduce the quotations on outstanding
Liberty bonds
Must Cut Expenditures.
At present ordinary Government re-
eeipts are not teeping pace with dis
easements. Next year. on the present
hasis of taxes and expenditures. they
should run about even. This apparently
caves but single course---a sharp re-
duction in expenditures and a corre-
spending Increase OF revenues
Authorized expenditures OF the Gov
crnment for the current fiscal year end
ing June 80 next aggregate s4.7S0. .s29.-
5io. The larger items included are
Treasury Department tincluding interest
on the public debit. s1,737, ,327 inde-
pendent Government offices, s930.050.-
ss7 War Department and military en-
tablishment. s4s5.csa.l26: Navy Depart
ment, s453,s7S.2Ji Interior Department