New-York tribune., 1920-12-09

\ T.. "
and 20 per cent on spent; $4,000 to
go 0.o00. 20 per cent and 80 per cent;
$4,000 to $4,000, 20 per cent and 50
per cent; $4,000 to 100000. 20 per
cent and 40 per cent, and over 100000
2O'per cent and so per cent, or d total
tax Il 70 per cent.
Ihc present maximum rate is 70 per
cenl on incomes of Sl,O00,0O0, but Mr.
Houston declares it has long passed
me point Of its minimum productivity
since it encourages the investment in
taN-cNempt securities. He says the
only effective way to tax the rich is to
adopt rates that do not force invest
men IN taX-eXempt securities
sec Greater Return to Government
The new rates, while not laying as
hlgh a levy against The great incomes
WILL the Secretary expects. produce a
greater return TO the government since
the wealthy class will not find it profit
aDle to invest in bonds o. states, coun-
tries or municipalities which are tax
exempt, but pay d lower rate Of in
torcst.
The repeal Of the tax on soda foun-
tam and other beverages is asked. the
secretary says, because the collection
OF me tax, the aggregate Of which is
Sn'a t. mas presented an administrative
problem Of magnitude Added to that,
Mr houston says, there has been con-
taxes
Iho excess profits tax. Mr.. Houston
ceciafcs, has not fulfilled the thcoret-
lchi grounds upon which it was en-
acted and has been found to be wrong
both IN theory and in political philos-
opAy lie says it Disseminated against
tne cohservatively financed corporation
"hllc aiding materially the firms whose
capitalization is exaggerated. He
urges That it be replaced by some form
OF corporation profits tax, not only
on thc grounds Of the governments
revenue needs, but upon grounds of
equality and justice. The CORPORATION
p1oilts, the Secretary continues, should
not be allowed to cscare with tax
OF 10 per cent while other taxpayers
are subjected to taxes on their incomes
ranging as high as 70 per cent.
Recommends Rigid Economy
Mr.. Houston again urges the neccs-
sity for rigid economy in government
expenditure, asserting that only by
conserving the finances carefully can
the expenditures be kept within the
900 600 annually which he sug-
gests should be the basis for yeve-
nue. program. He is hopeful, however.
that with the heavy burdens placed by
the transportation act out of the way
there viii be substantial excess
shown by government receipts over
government expenditures.
An analysis Of the government ex-
pondlturcs for the last fiscal year de-
vclopes the fact that almost one-ffth
Of the $1,000 10000 paid out was spent
in connection with I ederal control and
the guaranty of earnings for the rail
roads. Only one department OF the gov
ernment-the War Department-spen
more than was used in connection with
the carriers The War Departments
total, the record shows, was sl,Gl1,-
100000, against S1,037 900 900 for the
railroads.
Discussing the war debt and a pro-
gram for its retirement, Mr. Houston
says that within the next thirty
months the government viii have to
ply off approximately $500 900 900 in
Victory notes, war savings certificates
and Treasury certificates of indebted
ness. He proposed that the Treasury
certificates be not funded further; that
they be retired as rapidly as the Treas
urys conditions permit, so the program
for redeeming other government obli-
cations Will not be hampcrcd by stimuli
taneous payments.
Would Extend Allied Debts
Mr. Houston tells Congress that the
heavy payments required by the trans
portation act had disarranged the gov
ernment's fiscal plans, but he believes
early spring will witness final settle
ment of the claims of the railroads
under the guaranty provisions, and
that the Treasury then can proceed
with its previously announced program
OF meeting and retiring the war saw
lngs certificates, amounting 70 $780,
coo 900, and the Victory note issue,
which aggregates $4,000 100000.
Reviewing the loans 10 foreign gov
ernments, Mr.. Houston says The Amer
ican government advanced in cash be-
tween April "a, 1917, and November
10, 1920, a total Of $3.50 .S23,677 OF
tnis amount. approximately Sl63. .00O, 900
has been advanced since Novemb Der Is,
1919. under credits previously estab-
iished to five foreign governments. OF
TINS, France received $4,000 ,0OO
italy $2O O,4l6.000; Greece, S15 100000
Belgium, $40 ,469 900, and Czccho-Slo-
Vakia, SS,566, ,0O0.
determination as 10 the form which
the obligations Of the foreign govern
mcnts will take, Nh. Houston says.
bpt he recommends they be allowed to
extend until June, 1947, at which time
they must be paid under existing law.
The foreign governments, the Secrc-
tary says, should be given every ad-
vantage to prepare for the payment by
whatever arrangements they deem best
suited to thn;c individual reOuircments.