The Birmingham age-herald., 1920-11-08
4 BILLION ANNUAL TAX BILL LIKELY
 ID BE CONTINUED
Recommendations Already Laid Before Houston, Who
 Will Probably Ask Con-
 gress to Adopt Them
By AsSoc,afed Press

N Washington November 7.-The na- !tion will face a continuation of the an- Inual tax bill of four billion dollars for da period Of at least three years if lCongress adopts recommendations ldrafted by treasury officials, and ! (which, it was understood tonight, have tbeen laid before Secretary Houston for iapproval.
 I Mr. Houston probably will include ! Bsuch recommen dations in the form of an analysis of the governments finan- cial condition in his forthcoming an- nual report to Congress. The analysis will show, and accompanying recom- ! mendations twill suggest, it was said. that a threeyear programme for tax revision is required in order to meet maturing government obligation and cover current federal expenses.
 Approximately $S00o 100000 in Vic tory notes. War Savings securities and treasury certificates of indebtedness will be due for payment within the next three years, treasury figures show. Re tention of the present aggregate level of taxes, or maintenance of the annual revenue of the government at about S4. ,000,0o then is held to be un- ayoidable on the face of average eXpen- ditures estimates for the period.
 Recommendations to be made by MT. Houston, it is understood, will propose abolishment of the excess profit taxes in their entirety and the substitution therefor of graduated income tax of d substantially deeper cut than under present revenue laws. It was believed the new income taxes would apply only to incomes above $5,000 annually, and that provision would be made for a graduated increase even on the add1- tional tax as the amount of income grows larger.
 STRICT ECONOMY NECESSARY
 The Secretary is expected to advise Congress that the strictest economy in federal appropriations is necessary 1T the programme outlined on the basis ot a four billion dollar tax bill is to be accepted. He said that there was no way to estimate with any degree of ac- curacy what even the present laws would yield in revenue, because or the rapidly changing conditions in business as a result of after-the- war transition and readjustme ent. MT. Houston's view of this was said to be that tax receipts would be materially lower later in the present fiscal year, which ends June 30, 1921, and that therefore the govern 1nent income under the present revenue laws could not be taken as basis Tor calculating future receipts,
 This attitude, which is held also by practically all treasury officials hay ing to do with tax collections, fore- casts s. task of great difficulty Tor me framers of the new revenue act. The treasury will insist strongly on legis- lation which would produce four bil- lions for the next year, but the ways and means of getting it will be left to Congress except for the suggestions contained in the treasury report. In fact, the tax law framers will be in formed that there Is no alternative to voting a revenue act that Will produce the required amount.
 VIEWS EXPECTED TODAY
 The programme for handling the na- tional debt, and its payment is obiiga- tory--can be accomplished only through annual revenue of four billion dollars treasury officials hold. With the Vic- tory notes maturing in 1923. and the War Savings securities falling due in the interim and until 1924, 1t was de- clared that the four-billion- dollar, tax level might have to be continued ev6n until the latter date. Treasury views are expected to clash with those of the republican majority in Congress on questions Of ways and means of obtain ing the needed revenues. But with the changing administration, it was under stood. the present regime at the treas ury would merely suggest and offer It. tie argument in support of their stand for repeal of the excess profits taxes and replacement of the amounts so gained by higher income taxes
 It was expected tariff questions would be brought into the discussion and that those in charge of tax legisla- tion might seek to offset some of the deficit by higher duties and customs according to the treasury argument Tor wiping the profit tax provisions off the statute books.
 TO CONTINUE w. S. s.
 The treasury is committed to con- tiruation of the sale of Savings securi- 2 ties Although amounts thus obtained are small, they help materially in re- lieving current burdens of demands on the treasury by spreading out the maturing dates, according to officials.
 This feature of the financial status nf the government also will have to be considered in the next tax laws since officials believe it offers one road for the distribution of small amounts of the tax burden over several additional years. It was said to be only a means of deferring payment, but after the Victory notes have been retired. securi- ties on which the payments have thus been deferred can be better handled.
 Meanwhile the treasury will carry on its announced programme of short term financing, issuing certificates of indebtedness to meet current require ments in anticipation of quarterly pay ment of income and profits taxes. It was said that the certificate issues probably would continue on bi- monthly basis until Congress indicates what it will do in the way of tax legis-
 ation.