The daily times., 1921-09-06
ADMINISTRATIONS Al
Republican Leaders Remember
They Promised in the 1920
Campaign an Immediate Re-
peal OF the Tax, Must Occur
Before the Congressional
Election.
(By David Lawrence).
Copyright, 1921, by The Daily
Times }


Times.)
Washington, Sept. 5.-The Hard
ing administration intends to put tho
full weight of its influence behind
the original proposal of Secretary
Mellon, chat the/excess profits tax be
repealed as of last January, so that
when American business makes out
it's income tax return next March
there shall be only the corporation
tax of 2 1-2 percent to pay.
The change made in the House bill
whereby the excess profits tax would
be repealed beginning next January,
administration and was passively ac-
cepted by republican House leaders
because of a conviction that the Sen
ate could alter it and President Hard
ing would bring pressure to bear
when the conference committee of
the two houses finally had the mat
ter in hand
If the House plan were to prevail,
not only would American business be
compelled to pay excess profits taxes
next March, but the full benefit OF
the repeal would not be felt until
year from next March, which would
! be after the congressional election.
| The republican leaders are mindful
of the fact that they promised in the
1920 campaign an Immediate repeal
!, of the excess profits tax and already
! leading republicans, both inside and
outside of congress are saying that
if the excess profits tax is not re-
pealed, to take effect before the con-
1 gressional election, the pledge will
haye been futile.
Another argument being made in
favor of repeating the excess profits
tax as of late January is the fact
that this is probably the worst year
of the business depression following
! the war, and that if business ever
did need assistance and incentive,
this is the time to render aid. Fur
thermore, if excess profits taxes
taxes should be collected next March
for the year 1921, it will put strong
weapon in the hands of those mem
4 bers of congress who are opposed to
the repeal at any time of the excess
profits law They will be able to say
that if the excess profits tax yielded
so much in a bad year, the chances
are it will yield more in other years
| to come, and that it should be retain
ed. The 1921 yield would be looked
upon as a minimum that could not be
ignored. In other words, congress
might be put in the position of re-
pelling a tax which might become the
basis for campaign controversy next
spring and summer when the con-
| gressional primaries and elections
will be in full swing.
| Incidentally, the idea of sales
tax, or rather a production tax, has
not been altogether abandoned. Sen
ator Smoot is working on substl
tute for the House tax bill and has
announced that the entire tax pro-
gram can be simplified by means of
sales tax Owing to Senator Smoot's
Influential position in the administra-
ton it is obvious that he would not
be working necessarily during the re-
cess of congress if he did not have
some encourag cement from the White
House. 1t is known that in cabinet
discussions a production tax, payable
once and at the source of manufac-
ture, has been favored, and the only
real obstacle to the embodying OF
such a tax in the new bill is the
warning of the treasury department.
that it would take the income tax
bureau at least four or five months to
acouaint itself with the best method
of administering the new law, and
that the collection of the tax would
be an expensive proposition.