New-York tribune., 1920-03-05
'McAdoo Would
Reduce Federal
Taxes a Billion
,,,...ent Burden ON People
!. Too Great, He Declares,
md Would Defer Tax to
Refund War Debt 2 Years
p,s;ness Hurt, He Says
pl.mes High Cost of Living
On Levies and Asserts
Initiative Is Throttled

r.sHINGTON, March An imms-
-. billpn-dollar reduction in Fed
$, taxes was suggested in state
s -. issued here to-day by William G.
s.,aoo former Secretary Of the
r~.,ury. Tho present tax burden is
:. ~. ereat, he said. and ID shaving N
hiur;ou. effect on business"
W. McAdoo proposed that collection
:. , tax to establish q sinking fund
-, retirement of the war debt. which
recommended by former Secretary
e,... 10 begin with the hscal year 1920.
!. postponed for two years and that
=. deferred payments Of European in
.....t be funded unit! Europe is in q
.,.i.iop to pay its interest charges.
4rb. financial policies Of the nation,
:. embodied in future Congressional
,..sI.tion." said Mr.. McAdoo, Should
..,,,zs the utmost economy in expen-
,.n,. and might we'll fund in long
..,m bonds s1,oooDoo,coo per annum
q, two years of the amount now
,s,sed by taxation
Would Postpone Tax
sunder the laws a tax to establish
I per cent sinking fund to retire
hand, now outstanding is to be col
Iected, beginning with the fiscal year
1920. This might we'll be postponed
for at least two years and thus reduce
,hs tax burden by $25o,ooo,ooo
annually.
SThere, too,. Is the debt which
Europe owes US and which now
amounts to about ten billion dollars.
II the economic restoration Of Europe
had proceeded far enough SO that
Europe could now pay interest on this
debt las she will be able within a few
years), we should have an income of
l5Oo,O00,OO0 from this source. But that
Is not now available. Why not fund
tnat aIuUuut luS Qdy WnSn ~
will come back to US?
"By postpning for two years the
establishment OF a sinking fund and
funding tn. deferred payments of
European interest, we should cover
s750,OOO,000 of the S1,000,000,000 by
which our tsxation might be reduced
By disseminating purchases of Lib
erty bonds 'or retirement, under pro-
visions of existing law, the Treasury
would be relieved Of a large burden
now reflected in the floating debt and
which otherwise will have to be made
up by taxstion. 1t would seem that
reduction f our tax bill for the next
TWO years in this manner could be ac-
complishec and that it would involve
the issuance of additional bonds to
the extent of probably not more than
sl,500,000O00.
Initiative ThrottIed
Il trust that the Ways and Means
Committee Of the House of Representa-
ilves, IN which all tax measures must,
Of course, originate, will consider this
question in its broad relations to our
general economic welfare. The i'm
mediate burden of taxation is too
great. 1t is having an injurious effect
on business. 1t is contributing
factor Of large proportions in the high
cost OF living Its inevitable tendency
Is Is to stiae new enterprise and to
throttle initiative. 1t is both unscien-
sltc and inequitable.
In view of the approaching decline
10 our export trade, with the inevitable
reduction in the volume of business in
tne country, it will become doubly i'm
portant to revise and to reduce taxa
!on IN order that business may not
nave TO carry an unnecessary tax bur-
oea throughout this period of readjust-