Evening star., 1921-10-10
SM0OT SALES TAX
GIVEN NEW LIFE
Developments of Last Forty.
Eight Hours Arouse Hopes
/ of Its Supporters.
HOUSE LEADERS FIRM
Republicans From East Say They
" Will Not Accept Increase
to so Per Cent.

to so Per Cent.
Developments of the last forty
eight hours among the tax revision
lists Of the Senate have given hope tt
its supporters that the manufacturers
sales tax as proposed by Senator
Smoot of Utah, republican member OF
the finance committee. may yet be
adopted as a compromise to end the
existing tangle.
In the first place. just when the
progressive republicans of the middle
west and west thought they had the
situation we'll in hand and had framed
a number of compromise amendments
including the plan to increase the
surtaXes on larger incomes so that
the highest bracket should be so pei
cent instead of the - per cent pro-
vided in the House bill and in the bill
as originally reported to the Senate
republican senators from the east be-
gan an attack on this plan. The re-
publican members of the Senate
finance committee, at meeting Sat
urday. refused to report out the in
crease in the SurtaXcS on incomes ny
a vote of } to 4. Today. however, the
vote was reversed and by o-to-4 vote
in the SurtaXeS.
House Leaders Hold Out.
In the second place. the House lead
ers on the republican side have de-
clared that they will not accept the
proposed increase to so per cent In
he income surtaN rates. and say that
the House acted with deliberate judg-
ment when it fixed the highest brack-
. ct at 81 per cent.
1t appears that only coalition be-
tween the progressive republicans and
the democrats can bring about the
proposed amendment to increase the
slrtaxes on incomes above the 81 pei
cent mark. Admittedly this is no,
what the republicans want. They are
anxious to go before the country with
a tax revision bill all their own; not
a bill that has mixed political parent.
hood.
SO the supporters of the manu-
facturers' sales tax are hoping now
that their plan. as embodied in the
Smoot substitute bill, will be adopt
ed as Il compromise. capable of rals-
ing plenty of revenue. doing away
taxes and transportation taxes. and
presenting a real revision of the
tax laws on a basis that the repub-
licans may claim as their own.
SmoOt to Take Floor.
Senator Smoot is to take the floor
in the Senate tomorrow to discuss
the manufacturers sales tax in de-
tail. 1t is expected that he will sub
nit to the Senate enough of the in
lorsements of the plan that have
come to him from every part of the
country to convince the Senate that
there is popular support for it. The
vote on the manufacturers tax plan,
however, may be delayed for ten days
or two weeks. The parliamentary
situation is this: The tax bill is now
before the Senate for amendment.
When it has finally been perfected
Senator Smoot will lask a vote
on his substitute measure. which in
cludes the sales tax as it's principal
item.
Senator Smoot has been assured
that his manufacturers sales tax
will receive democratic support:
that democratic senators prefer it to
The original plan submitted by the
republicans of-the finance committee.
Senator Simmons of North Carolina,
ranking democratic member of the
finance committee and in charge of
the tax revision fight for the demo-
Gratis, has said that he is strongly
inclined to favor the plan.
Still Hope for Plan.
The situation, therefore, contains
more than germ of hope to the sup
porters of the sales tax plan. though
of course, the republicans may yet
straighten out their difficulties and
bring in amendments to the pending
bill which will be accepted by prac-
tically all of them, and the manufac-
turers' sales tax then will be side
tracked.
1t may be said. too, that more than
a majority of the republican senators
themselves look with favor on the
sales tax plan. as now modified and
presented by Mr.. Smoot. The progress
a
first.
Politics has played large part in
the demand that the income surtaXes
be increased over the House bill and
the Senate finance bill, and that
heavier taxes be laid upon corpora
tions. 1t is believed to be popular
to insist upon these changes. How
ever, the business of the country is
said to have been hampered by these
!, high taxes. and Senator Smoot and
others are insisting that if money is
TO flow back into industrial channels
and not be tied up still further in
taN-exempt securities there must be
a lowering of these taxes.
Want Business Revived.
It is not because they desire to
see the burden of taxation lifted from
wealth. they point out, but because
they want to see business revived
that they offer their plan. 1t was
for that reason that the House voted
for - Irr cent as the highest income
surtHX Bracket. and for the same rea-
son that the excess profits taxes have
been thrown into the discard in franz
ing the tax revision bill.
President Harding has been fully
informed as to the manufacturers
sales tax by Senator Smoot and
others. The President has not taken
any stand in the matter as between
the various factions in the Senate, but
it is believed that he does not look
with disfavor on the sales tax as
modified. He is particularly anxious
that the republicans get together on
a bill of their own, however. and that
they put it through with as little de-
lay as possible.