The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-08-06
TAX TANCLE TO
GREET HARDING
Deadlock Between Republican
Factions Already Reached.
Senate and Sec'y Mellon Take
Opposite Views.
REVENUE SHRINKAGE CLAIMED
Business Depression Cause of
Drop in Tax Collections.
BOrah Heads Faction Trying to
Cut Down Expenses.

Washington, Aug. e. President
Harding is coming home from his
cation to find another conflict in
progress between the executive and
legislative branches of the government.
It appeared certain today that only
presidential Intervention can straighten
out the tangle over the 1922 taxes and
end the dispute between congress and
the treasury department over how
much is necessary to keep the wheels
of the government turning for another
year.
Mellon Makes Demands.
Secretary of the Treasury Mellon
and his advisers, with an eye to the
spending needs of the government,
estimate the government will need
$4.55O, 100000 and they have put up
to congress the job of providing it.
Members of congress, with an eye
to the coming congressional elections,
on which their political lives depend,
estimate that these figures can be
trimmed by at least $500, 100000, per
haps more. So far they have refused
to figure on a national spending bill
of more than four billion and a half
dollars.
Deadlock Now Exists.
The deadlock exists. Both sides are
standing pat and apparently waiting
for some word from on high. Mean
while, the controversy already had
provided some embarra sSnents. Sena-
tor Borah, Republican. Idaho, who
successfully brought about the reduc
tion of the army from 220, 900 men to
1000 men in the face of strong ad-
ninistration opposition, is again on
the economic warpath.
This time he wants the army still
further reduced to 100000 men and
has introduced a resolution to this
effect The sentiment in congress for !
bringing home the $4,000 American
troops ON the Rhine which has been
lying dormant since the change in ad-
uinis:ratfons, is again being worked /
mp in view of the demand for economy. |
This, too, is likely to provide en- /
barrassmcnts for the administration !
in It's foreign policy.
Mellon Claims Shortage.
shrinkage in three months
of s330,OOO,000 in the estimated
government income for this fiscal
year based on the present reve-
nue. law is disclosed by the statement
recently presented to the house ways
and means committee by Secretary
Mellon. The total income is estimated
now at $4217,643,0 as against the
estimate of $4,547, ,643,000 contained
in Mr.. Mellah's letter of last April 10
to Chairman Fordney.
penditures have decreased only Sill
S64.216. The estimated excess of dis
bursements over receipts is placed now
at 1886, 369.517. as compared with an
est mate OIL s1S,234,033 made by the
treasury last April.
Even Interest Shrinks.
OF the total shrinkage in receipts
S13o.0G0.000 is charged to the expect
ed falling off in internal revenue
largely a result of the present busi-
ness depression. The remaining $780,
000, goo is accounted for by a revision
of the estimated amount to be re-
ceived in interest on foreign obliga-
tions.
In Mr.. Melons letter of April 80,
this interest fund was placed at S225,-
026,000 and was based on the assump-
tion that several countries would make
substantial payments. The estimate
now is SIS, 5000, most of which, it
is said is expected to come from
France.
Some Receipts Greater.
Analysis of the figures sent to the
= committee Thursday by Mr.. Mellon
shows returns from taxes for this fis-
cal year under the revisions sug-
gested by the treasury would be
$5.000,000 less than the estimate un-
der the existing law. Miscellaneous
receipts would be $5O,0O0,0OO greater
under the revision than at present but
S55, 600, 900 decrease in the returns
from corporation income and excess
profits tax if the latter tax were re-
pealed as of last January 1, and a flat
corporation income tax of Is per cent
substituted.
If the repeal were made effective,
as of next January /, however, the
estimated return from all taxes would
be $50,000,000 greater than under the
existing law. as the returns from the
corporation income and excess profits
tax would be approximately the same
as under the existing law.
1t is estimated by treasury experts
that under the law as it now stands
the corporations would pay total
of SLIPS, 900. 900 divided s66S, 900, 900
profits tax and s456,000.000 income
tax. Under the revision suggested ef-
fective last January l the corporations
would pay $1.O7O,OOO.0 900. divided
S413,000.0O0 profits tax and 1857 7,000,-
600 income tax. Should the revision be
made effective as of next January 1,
the corporations would pay the same
amount as under the present law.