The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-11
HOUSTON METHOD
OF REVISING TAKES
STIRS OPPOSITION
Majority of Committees in
Both Houses Against
Boost in Incomes.
AGREE ON SEVEN POINTS
Main Trouble Centres Over
Substitute for Excess
Profits Levy.
SMOOT FOR LID ON WOOL
Urges Embargo on Imports
Tariff on Sales and Surplus
Earnings Also Proposed.

Edf1IUSS AlSO IIOpOScu.
This is the sepenth of a series of
articles published by THE New York
HERALD detailing governmental condi-
tons in Washington and outlining
prospective legislation TO remedy df-
fairs. These articles qoiH be published
from day to day until the series is
finished.
Special Despatch to TIE NEW YORK HERALD.
WASHINGTON, Dec. 10.-Here is, as
nearly as it is possible to get after
weeks session of Congress, consen-
sus of the views of the leaders who
will have most to do in framing the
Governments new fiscal policy. 1t
does not reflect the views of the
Finance Committee of the Senate or
the Ways and Means Committee OF
the House on Secretary Houston's rec
concentrations for increased taxes on
certain specified commodities, because
these must await hearings before the
ever, that a majority of the members
Of both committees are opposed to the
specific increases and new taxes rec
commended by. Secretary Houston.
They also are opposed to any sug-
gestion of increasing the tax on small
incomes.
As THE New York HERALD has
shown. the prospects for any general
taxation or tariff revision measure
during the short session are slight
The only relief legislation of a tenn
porary character that appears to have
a chance of going through is Senator
Reed Shoots proposal for an embargo
on wool. cattle and cereals. There is
serious opposition even to this. Many
members of both houses will have to
be convinced of its necessity before
they will vote for 1t.
In the framing of permanent fiscal
policy Senators Penrose Pa.). Smoot
(Utah) and Watson Ind.) and Repre-
sentatives Fordney (Mich) and Long
worth (Oho) probably will have more
influence than any other group in the
Congress.
Where Members Agree.
SO far they are agreed on these
things:
1. That the excess profits tax. which
has been yielding upward of S1.000.O00
600 q year. must be repealed and sub
sttute revenue provided.
2 That there should be no increase in
any Of the existing taxes to make up the
deficit.
2. That the funded debt of the Cow
crnment. $4,000. 100000 should be ex-
tended over a period Of from forty to
sixty years
4. That the floating debt of $500
900 should be retired out Of current
revenues.
5. That the establishment of the
protective tariff policy will yield from
si50.000.000 to 200,000,000 additional
annual revenue.
6. That no extension of time can be
allowed for the payment of taxes now
due.
Z. That many of the minor. but bur-
densome. taxes under the present law
ought to be repealed. IL possible
There is no difference of opinion upon
these fundamentals involved i'm the new
policy. The main disagreement at this
time appears over the nature pf the sub
stltutc revenue producing factor that Is
To- take the place of the excess profits
tax. Hearings have been arranged be-
Gore both the Senate and House COM
niittees, and both are deluged with re-
quests from individuals and organiza-
tons who want to be heard on the tax
and tariff issues. Until these have pro-
crossed n definite programme is impos-
&. sble OF presentation.
Senator Penrose. chairman of the FL
rance Committee of the Senate. Is OPP
posed to the principle of the sales tax
and favors instead a tax on undistrib-
uted profits. His method of distribute
ing the funded debt over "A period of
years would be through sinking fund
processes under the control of the Treas
ury Department rather than through
the issuance of serial bonds
smoot for sales Tax.
Senator Smoot is inclined TO favor
the general proposition OF sales tax,
but Is chiefly Interested In establishing
an embargo on the importation of wool
as a temporary cxpedient for the relief
Of the wool growers of the country.
Senator Watson favors a tax on final
sales and believes that II would produce
~ L per cent. at leaSt Sl.UOU,OOU,OVO
annually. and. II he Is convinced that
the growers themselves. ~instead of the
middle men. would benefit. would sup
Port the Smoot plan for an embargo
on WOOL cereals (wheat, oats and rye). !
But he favors n bond issue rather than
the sinking fund method OF retiring the |
funded debt.
Representative Fordney, chairman of |
~ Ways and Means Committee OF the |
H'"sc. is opposed to the Smoot en- |
barge. but believes that the sales tax
II the logical substitute for the excess |
profits tax.
representative Longworth. while IA |
Noring the sales tax as an incentive |
toward thrift. believes that II would /
provide an inadequate amount and IA |
vors instead u tax on undivided profits. |
Most consideration of a sales tax IL |
based on the principle OF tax on the |
maj sale There is little sympathy cx-
pressed with the idea OF a tax on every |
turnover. and the objections to this form
or levy arc so universal that II may /