Evening star., 1921-03-16
PRESIDENT MAY ASK
TAX REFORMS FIRST
Some Senators See DISPOSE
ton to Let Tariff Measure
Follow Later.
BY n. o. MESSENGER.

Some of the senators who attended
the conference with President Hard
| ing last night over the precedence of
! taxes or tariff in consideration by
| Congress came away with the i'm
preston that the President was dis
posed to favor taking up reform first
| They admitted, however, that they had
| no assurance to that effect and, as the
| position of the senators is known, the
wish may have been father to the
thought.
In the conference Wednesday be-
tween the Senate committee on finance
and the House committee on ways and
means the senators were unanimously
Tor taking up taxes first, while the
ways and means committeeman with
the exception of Mr.. Longworth and
Mr.. Bacharach, were for tariff first.
Inc Presidents wish. if he expresses
it, is expected to decide the issue.
Taxes More Difficult.
1t is said that if tariff does come
first, while the House is considering
it the Senate committee may go ahead
with hearings on tax reforms. The
tax question is admittedly the more
difficult of solution of the two
In considering tax reforms, it is point
ed out that it will be necessary first to
ascertain approximately how much re-
turn Will be yielded by the income taxes
now due. 1t will be several weeks be-
fore the sum can be approximated and
even then there is likely to be wide dis
crepancy between expectation and full
fillment.
Two important calculations are neces-
sary to be made upon this income draft ::
First, the amount Of the falling Off in
income from excess profits. expected to
be materially less this year. as we'll as
the loss of income from the higher sur
taxes. Second, the amount of money
which has been invested in non-taxable
securities instead of in taxable invest
ments or put into legitimate business
whose profits in the future would be
subject to tax.
Immense Sums Diverted.
1t is known that immense sums have
been thus diverted from the taxgather-
er's outstretched hand. Wealthy men
have been selling their holdings and
placing the money in government, state
county and municipal bonds exempt
from taxation. Estimated figures have
placed the totals at such large figures
as to forecast big slump in income tax
revenues.
The Home Market Club. which is
behind the movement to change the
method of valuation of imports-to
value them on the basis of the whole
the invoiced price abroad-is circulat-
ing the argument of Thomas o. Mar
vim, before the ways and means COM
mittee, advocating the change. In
his argument he said:
New Valuation Urged.
when our first tariff law was
adopted, manufactures were but
slightly developed in this country and
possibly difficulty arose in establish
ing the American value of some of
the imported articles. The situation
has completely changed. however,
and almost all imports are either of a
competitive character or of a nature
SO well known that their value in
the American market can readily be
ascertained. 1t has been testified
time and again by tariff experts and
government officials that the difficulty
of ascertaining the honest foreign
valuation is much greater than any
difficulty attending American valua-
tion of the article.
There is a marked difference in
the cost of similar articles in for
eign countries. The cost in Germany
may be lower than that in England,
the cost in Japan considerably lower
than that in Germany. Our system
of estimating value on the market
price in the country of origin gives a
decided preference to the countries
of low production costs"
These arguments are said by the
moderate tariff men ito be ali yery
welP' from the viewpoint of those
seeking the highest rate of protec-
tion the tariff will bear. but are re-
ceived obviously by those who fear
that the new plan is a stalking-horse
for the insidious application Of rates
that will be SO high as to boost the
cost to the consumers here at a time
when all impulses are for lower costs