The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-08
OBLIGATIONS TOO BIG
Government War Issues
Outstanding Will Total
Eight Billion Dollars.
TARIFF MAY SHOW WAY
Houston Plan Is to Abolish
Excess Profit Scheme and
Revise Income Tax.
Ru re Aaaocsafed Prsss.

By the Associated Press.
WASHINGTON, Nov. T. The nation
will face q continuation of the annual
tax bill Of four billion dollars for three
more years If Congress adopts recon-
mendations drafted by Treasury off,
cials and which, It was understood to-
night, have been laid before Secretary
Houston for approval.
Mr.. Houston, 1t was stated, probably
will include such recommendations in
the form Of an analysis Of the Govern
ment's financial condition in his forth
coming annual report to Congress.
The analysis will show. and accom-
panying recommendations will sug-
gest. II was said, that three year
programme for tax revision lie re-
uuired in order to meet maturing
Government obligations and cover
current Federal expenses.
big obligations Outstanding.
Approximately eight billion dollars In
Victory notes, war savings securities
and treasury certificates of indebtedness
will be due for payment within the
next three years, Treasury figures show.
Retention of the present aggregate level
of taxes, or maintenance Of the annual
revenue of the Government at about
four billion dollars then is held to be un-
avoidable on the face of average ex-
penditures estimated for the period.
Recommendations to be made by Mr..
Houston, It is understood. will propose
nbolishment of the excess profit taxes
in their entirety and the substitution
therefor OF graduated income tax OF a
substantially deeper cut than under
present revenue laws. 1t was believed
the new income taxes would apply only
to incomes above $4,000 annually, and
that provision would be made for a
graduated increase, even on the addi-
fIonal tax, as the amount of income
grows larger
Tho Secretary Is expected TO advise
Congress that the strictest economy In
Federal appropriations Is necessary IL
the programme outlined on the basis OF
a four billion dollar tax bill Is to be
accomplished He has said that there
was no way to estimate with any de-
gree Of accuracy what even the present
laws would yield in revenue. because of
the rapidly changing conditions in busi-
ness as result Of after the war transit
tion and readjustment Mr.. Houston's
view of this was said to be that tax
receipts would be materially lower later
In the present fiscal year, which ends
Tune 80. 1921, and that therefore the
Government income under the present
revenue laws could not be taken as a
basis for calculating future receipts.
This attitude, which Is held also by
practically all Treasury officials having
10 do with tax collections. forecasts a
task Of great difficulty for the trainers
Of the new revenue act. The Treasury
will insist strongly on legislation which
would produce four billions for tho next
year, but the ways and means Of get
ting II will be left to Congress. except
for the suggestions contained in the
Treasury's report. In fact. the tax law
trainers will be informed that there ia
no alternative to voting a revenue act
that will produce the required amount.
The programme for handling the ma
tional debt--and It's payment is ooliEa-
tory--can be accomplished only through
annual revenue Of four billion dollars
Treasury officials hold. with the Vic.
tory notes maturing In 1929 and the
war savings securities falling due in the
interim and until 1924. It was declared q
possibility that the four billion dolla,
tax levy might have to be continued
even until the latter date.
Tariff May Furnssh Means.
Treasury views are expected to CLASH
with those of the Republican majorit,
in Congress on questions OF ways and
means Of obtaining the needed revenues
but with the changing administration
Il was understood, the present regime a'
the Treasury would merely suggest anC
offer little argument IN support Of theii
stand for repeal OF the excess profit,
taxes and replacement OF the amount'
so gained by higher income taxes.
1t was expected that tariff question
would be brought into the discussion
and that those In charge of tax legisla
ton might seek 10 offset some OF tn
deficit by higher duties and customs. &C
ceding To the Treasury's argument 10
wiping the pfofits tax provisions off tn
statute books.
The Treasury IL committed to a con
tinuetion Of the sale OF savings securi
ties Although amounts thus obtaine'
are small. they help materially in re
lleving current burdens Of demand o'
the Treasury. by spreading out the ma
turing dates, according to officials. Thi
feature OF the financial status of tn
Government also win have to be con
sidered IN the next tax laws, since ON
ciais believe Il offers one road for tn
distribution Of small amounts Of tn
tar burden over several additional years
II was said to be only means ~ de
ferring payment. but after the Victor
notes have been retired securities o
which the payments have thus been d.
ferred can be better handled
Meanwhile the Treasury will carry ~
'ts announced programme of short tori
0nancing lesulnR certificates of intleil'
.dneas to meet current icqllr-a.o.ts !
anticipation of quarterly paynen< Of In
ssrne and profits taxpe