The evening world. [volume] (New York, N.Y.) 1887-1931, 1920-03-18
Meet Hard Luck in
Having to Act in a Cam
paign Year.
IN SEARCH OF A PLAN.
Court Decision on Stock Divi-
dendS Make Necessary i,OOo,-
100000 Additional Revenue.
By DaUid Laurence.
especial Correspondents Of The Eve.
ming Worldly

NWN "eNNesl
WASHINGTON, March IS Copy
right. 1s30).-Taxation may not be
as Ineligible TO the average man
as the stories OF extravagant ex-
penditure and Incompetence during
the war which has heaped big debt,
but the Republican majority In Con-
gress Is face 70 face with the most
troublesome turn of luck that ever
hit a political party in . campaign
year.
For the decision of the Supreme
Court Of the United States on stock
dividends has not only subtracted
from the revenue that had been ex-
pected. but unless remedied by act
OF Congress, hundreds Of millions of
dollars will be lost and the eagerly
looked for day when taxes can be
reduced will have been postponed.
The Ways and Means Committee
knows it--Republicans as well as
Democrats. The long and highly
technical letter from. Secretary Hous-
ton OF the Treasury Department
ELECTED by Congress suggests several
remedies, none OF which Is particu-
larIy pAlatable 10 the group of tax
payers who would be affected by
amendments to the present law.
ALL SORTS OF SUGGESTIONS
FOR LEvYINo TAKES.
Every suggestion. from a nat tax
that would virtually compel business
concerns to distribute their profits
instead Of holding such profits to-
rether as ''undiAtributed' OF In the
form of stock dividends' to the
novel idea OF a per cent. tax on
sales OF all kinds in everyday bush
ness, has been made. Some OF the
proposals, backed by business organ
ixatSons Of many kinds, arc nebulous
as TO their application. Some favor
a per cent tax on every article
sold. whether by the wholesaler or
the retailer or the middlemRn- This
might mean a / per cent. ali aaong
the line, and It is defended on the
ground that even II collected four or
Ave times It would stih be less OF
burden on initiative than the pres
ent excess profits tax.
But Congress 10 compelled TO do
something TO recoup the loss by the
stock dividend decision. Chairman
Fordney, 7Gpublican leader, openly
promised action in reply to an inquiry
from Representative Champ Clark,
the Democratic leader. asked Rep
resentative Cordell Hail OF Tennessee,
who wrote the original income tax
law To give his view OF the situation.
DEMOCRATS CUT DOWN THE
TAKES AND WAR EXPENSES.
'-rhe Democrats fOresaw the de-
mand for a reduction OF taxes" he
said, "and promptly cut down $2,OoO,-
600, 900 in possible revenue. This was
done over the protest OF the Republi-
cans In 1918. for they would have
hlsed to do II themselves when they
| came In power. The Democrats
moreover, reduced the expenditures
from about $4,000, 900, 600 to $s,OOO, ,OOO,-
600 as soon as the war was over.
NOW the Republicans have actually
cut down the expenditures by N,OOO,-
Ooo. 900, but with a $4,000, ,OOO, 900 cut In
revenue made by the Democrats, they
are stnl confronted with the necessity
Of cutting down expenditures another
81 .oOO. 900, 900 before there can be any
reduction In taxes. AS a matter OF
fact. whether It had been a political
year or not the reduction in taxes
should have been made at exactly the
time that II was. Nevertheless, with
the increased loss OF revenue which
results from the Supreme Court de-
cision, It puts the Republicans right
up against il
Such a view, even though expressed
by a Democratic member OF th'
WAYS and Means Committee, Is CON
curred In privately by many Repub'
llicans except that they naturally ar
que that the dsbt created by the wal
is something which might never have
, accumulated under competent man
agement, all OF which will be dtfn
cult TO settle even on the polttica
stump. For the fact Is the countrl
! can expect no reduction in taxes TO
three years unless some amendment
are made TO the present tax Law
E which will bring in more Tevenu
\ and estimates are appreciably cut
1 They have already been ruthlessl
% reduced,
= DEMOCRATS WILL NOT sTANl
r ON WILSON MESSAGES.
The Democrats are, OF course, pre-
Irarfup IN fgO Ia the country with m