The New York herald., 1921-07-05
BUDGET REQUIRES
TAX REVISION FIRST
That Is View of Many Con-
gresSiOnal Leaders After
Studying Law.
Special Despatch to THE New York HERALD.
New York Herald Bureau,
Washinefon. n e Lulx 4

Special Despatch to THE New yonK HERALD
New York Herald Bureau,
Washington, d. c., July 4.
Revision OF the tax laws at the earli-
est possible date is necessary for the
success Of the new budget system, in
the opinion of many Congressional lead
ers. Thus far the move for switching
revenue revision ahead of tariff re-
vision is centred in the Senate, where
members of the Finance Committee are
giving serious consideration to 1t. But
the discovery which was called to the
attention Of leaders by THE New York
HERALD has attracted marked attention
The apparent necessity for immediate
revenue revision is found in the first
few paragraphs Of the new budget
law, which make 1t mandatory to pre-
sent to Congress not only estimates of
expenses and appropriations, but also
the probable amount OF the revenues
of the Government for the next fiscal
year. Here is the language of the law:
The President shall transmit to Con-
gress on the first day Of such regular
session the budget. which shall set forth
in summary and In detail:
'(A)-Estimates Of expenditures and
appropriations. &C.
"(B)-His estimates of the receipts of
the Government during the ensuing
fiscal year, under % laws existing at
the time the budget is transmitted, and
also (0 under the revenue proposals, if
any, contained in the budget
Paragraph V. is the salient feature
OF the budget law, which in the opin-
ION or the Senators whose attention has
been directed to it, makes il imperative
for Congress in the interest of intelli-
gent operation of the budget system to
complete revision of the present tax
laws in advance of the submission OF
the budget
This matter was brought to the at
tention particularly Of Senator Watson
1nd). who Is the prime mover on the
Senate committee for having the SEN
ate consider the tax revision ahead of
the tariff revision, after the House has
completed its consideration of both
measures. Tariff and revenue. of
course. must originate in the House.
+, Il am much impressed by the force of
the argument that the intelligent admin
istration of the budget law requires i'm
mediate revision OF the tax laws Senator
Watson said. Apparently it will not be
possible for the President to submit to
Congress the estimated receipts for the
next fiscal year in advance of revision
of the revenues. The tariff, of course,
Will produce some revenue, but by no
means the amount that is involved in the
revenue revision, which. after all, is the
one law upon which the Treasury de-
pends for It's finances In running the
Government"
Senator Watson said he intended to
present this phase of the matter later in
speech in the Senate
There Is still another provision in the
budget law which shows how necessary
II is for the President to know what the
probable revenues for the next fiscal
year are to be before he can submit his
recommendations to Congress. Here Is
the provision:
''If the estimated receipts for the en-
suing fiscal year contained in the budget
are less than the estimated expen-
diture for the ensuing fiscal year con-
tanned In the budget, the President shall
make recommendations to Congress for
new taxes. loans or other appropriate
action to meet the estimated deficiency"
Obviously It will be impossible for the
President to present to Congress any
such estimate. Congressional leaders say
by using the present revenue law as a
basis. The only way any such estimate
can be presented is first to write the
law which fixes the revenues for the
coming fiscal year.
There are admitted difficulties in the
way of having tax revision precede tariff
revision. The House is strongly opposed
to ii and might block any such attempt
on the part of the Senate. On the other
hand. IL is said the country at large is
far more interested In knowing what its
taxes are TO be than what the changes
will be in the tariff schedules.