The Washington herald., 1921-03-30
Sullivan Says Members
Sound Sentiment in
Home Districts.
POLITICAL RESULTS
OF MOVES FEARED
Sentiment for Repeal of
Excess Profits Act
Grows.
By MARK SULLIVAN.

What Is said here aims to be q
summary of impressions received
from a considerable number of the
men who will have a part in re-
writing the tax laws in the coming
Congress. 1t omits going into the
great mass of dispute about the
merit or expediency of proposed
changes and confines itself to the
effort to describe what may be
termed the collective state of mind
of these men.
The first impression is that the
minds of the leaders are much less
|crystallized than might be expected.
II frequently occurs that you will
ask a member Of the Finance Com
mittee of the Senate. or of the Ways
and Means Committee of the House,
how he feels about reducing the in
come tax or about adopting the d.
rect sales tax. and he will reply in
terms that indicate he is still feel
Ing his way and has hardly begun
yet even to acquire the information
upon which his judgment will later
be formed.
seatiment Sounded.
There is an attitude of waiting
not only for the Information and
facts which will be developed at the
hearings soon to begin: there Is also
an attitude OF waiting to learn the
state of feeling of the country. On
this point the Representatives and
Senators, who are now at their
homes. are expected to report as
soon as they return for the opening
of the new session.
There is a preponderance of feel
ing on the pErt OF thsse Tezders tnat
the excess profits tax be abolished.
The reason for this Is that II Is
practically agreed that this form of
tax has now ceased to be a revenue
producer. The excess profits tax was
effective and yielded large income
during the period of imitation. The
excess profits tax, so called, con-
sisted less of profits in the true
sense than of the rapid expansion in
the price valuation of materials due
to wartime imitation.
Conditions Changed.
During the present and coming
period of depression, the rule will
work the other way. and nobody ex-
poets that the excess profits TAX will
produce any considerable amount
OF revenue duriaS he presen: year
or in the near future. The dssposi-
ton of the leaders to repeal this tax
is general. Tho exceptions are those
who think it would be bad politics
to repeal it. The theory is that re-
pealing the excess profits tax looks
too much like letting the large cor
porations of. The politicians who
take this view say II will he better
to leave the tax stand. even though
it produces little or no revenue; or
else 10 reduce the tax rather than
abolish IL entirely.
As to the income taxes. nearly all
the leaders agree that the very rich
Leople of the country. who are taxed
at present from 10 to 20 per cent Of
their incomes. are seeking refuge
by taking their money out of ordi-
nary investments and putting 1t into
government. Stat2 or municfpal1
bonds, which are exempt from tax
alton. This being so. 1t is argued
that il will be wiser to remove this
temptation by lowering the taxes
on very large incomes TO 4 maxi
mum of not over 40 per cent. The
leaders agree that to the portion of
the public which does not Under
stand economies this would. have
the appearance of making things
easier for the rich, without doing
anything to help people Of smaller
incomes. But in spite of this unfor-
tunate appearance, from a political
CONTINUED ON PAGE THREE.