South Bend news-times. (South Bend, Ind.) 1913-1938, 1921-05-02

ave specific sales tax now in effect
on many relatively nOn-essential
articles"
Mr. Mellon says also uat he
wishes % were possible TO recon-
1lcnd the repeal Of the transporta-
Con tax. but adds that it produces
annually around S330.000.O0O and
as repeal cannot be effected with
afety. unless congress has an ac-
coptabIe substitute 90 offer"
The secretary OF the treasury also
plgrssts 20 congress that 20 may be
fadvisa hIe' 20 take action by sta
ute or boz constitutional amendment
~ restrict further issues Of tax ex-
omrt securities. saying IL Is esti-
mated that there are now outstand-
hs perhaps $4,000 100000 OF tax
exempt securities. the existence Of
which CONSTITUTES an economic evil
af tho first magnitude"
Pie points out that il IS now the
policy OF the federal government
not TO issue its own obligations free
from prohts and surtaxes, but that
states and municipalities are is
suing ul tax EXEMPT securities IN
great volume. The continued issue
% tax exempt securities, he adds,
encourages the growth of public
indcbtedness and tends TO divert
capital from productive enterprise"
Stresses Expenses.
Emphasizing that expenditures
for this fiscal year have been for
the rate Of $1,000 .00O,0 900 Mr.. Mel
Ion warns congress that the nation
"canuot continue 10 spend at this
shocking rate" Substantial cuts In
current expenditures. he says. offer
The only hope Of effective relief
from the tax burden
"Thc last congress" he goes on,
amade "a creditable record in re-
ducirr appropriations and It effect
cd substantial economies. Notwith-
standing the reduced appropria-
uong expenditures have continued
Unexpectedly high and the reduc-
ucn I'm expenditures has barely
Rent pace with the shTinkage in re-
cciuts.
Reduction Of appropriations.
moreover. viii not Of itself be ef-
fective Co reduce expenditures unless
az The same time congress avoids
or CONTROLS measures which result
TN expenditures without ar apparent
appropriation Reapportionment Of
uuexpcnded balances, revolving fund
appropriations and appropriations Of
Receipts and other indefinite author
Kations Of expenditure have in the
past been responsible for hundreds
Of millions of dollars Of actual cash
outgo."
Year Estimates.
Mr. Mellon says that estimates for
the fiscal year 1922 are subject to
great uncertainty as 20 both receipts
and expenditures. The estimated
collections of S3.7OO.OOO.OOO Of in
terral taxes are based on the pro-
visions of existing law, he adds. and
ere SS50.o0o.00O less than the es-
tinated collection for 1921 chiefly
because OF the shrinkage in bust
ness.
"They are liable to be somewhat
Further reuccd from the same
cause" he says. adding:
1.-THE estimate or ordinary expend-
lures of S4.O14,OOO.OOO VIII on their
part be affected by appropriations
which arc still 20 be made. The es-
timated expenditures Of the war de-
partmcut and the navy department.
brgrrgating over SLIGO. 100000 for
Ices. viii depend largely upon the
military and naval policy adopted
by tho congress at the present ses-
sion.
THE estimate of about S545.OOO. p
200 fer payment TO the railroads
in 1928 Isl made necessary by the
provisions of the transportation act
and increased estimates Of the di-
rector general of railroads In alb
sense of drastic cuts I'm military and
naval expenditures. there is almost
no prospect. according to the es-
Inmates. if any substantial available
surplus in the fiscal year OF 1928"
Repeal or Tax.
Urging early repeal of the excess
profits taxes Mr. Mellon says an
Intelligent revision Of these taxes
should cncourage production and in
The long run increase rather than
diminish revenues. The profits
t1Nes' the secretary esJlmates. VIII
Nield not more IMAM S+oo'VVV'VOV
FOR the taxable year Of 1921.
As TOT SUBSTITUTE Tor the excess
prodts taxes. Mr.. Mellon cites es-
Inmates Of S4o0.t0o.opO annually as
yield from am additional fiat tax
or five percent ON corporate incomes,
PROVIDED ihe exemption or S-.UUV
nofv accorded corporations IS clint
nated with the profits taxes. such
a fat tax. he adds. would be simple
OF administration and easily determ-
med oN the laN-paYlns concern.