The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1921-07-20
NEW TAX MAY Be
RETROACTIVE TO /.
JAN. |, Cop. HOPE
Belief Prevails Substantial
Levies Will Have 10 Be
Made In Addition.

Leaders Of the Republican majority
In both branches of Congress. Who
expect to grapple shortly with the
revision OF internal taxes, said today
that they were confident the new tax
law will DO made retroactive to Janu-
airy of this year 20 that tax pay
ments to be made next year for this
years business will be at the new
rates.
Senator Emoot said that although
no agreement has been reached IN
the matter, he has no doubt that
policy will be followed in the nav
tax bill. as II has been in similar
measures In the past. Congressman
Longworth, who has given special
study to the question of tax revision
said the same thing.
Urge Early Passage.
Mr.. L.ongworth explained that tn
his Judgment the new taxes can be
made effective as of January l..
1891, Just az easily as they could be
ss of July 1 or October 1. The Inn
portant thing, he said, was to pass
the bill this year. II. for any rea-
son. it becomes tangled and Is held
up uptil after the end of 1921. there
will be serious difficulties. In his
Opinioh, III HdHluB the NV law. ap-
plicable to this years business.
Business men. It 10 reported here.
have become concerned lately rs TO
whether the new taxes would he
made to apply to this years business
or whether they would continue to
pay under the provisions Of the pres
ent law. The prolonged delay in re-
vising the lax laws and the uncer-
tainty that stiIl exists as to the time
when Congress win actually settle
down to the business and do the job
has caused many to believe that 1t
may be near the end of the year
before anything concrete Is done. In
that case II has been feared by some
II might be decided not to put this
years business under the new rates.
Entangiements Feared.
The only danger. II appears, that
the existing rates will run for this
year lies in the possibility of entan-
clements in the legislative system.
At present no one thinks entangle-
ments sufficiently bad to tie up tax
revision until after the end of the
year are likely. At the same time
some of the leaders seem to believe
that nothing can be taken for grant
Cd in this Congress and that caution
and careful management of>the tariff
and tax revision bills must be mad
from now until the measures are
llally passed.
In a general way. the views of The
Administration as to tax revision are
known. Secretary Mellon having writ.
ten to Congress weeks ago on the
subject. The outlines Of the Admin
istration plan call for the abolition
of the excess profits tax and the re-
duction OF the higher surfaces on
individual incomes. Also the so-called
nuisance" taxes would be repealed,
and some other features Of the ex-
listing law. To make up the losses.
the principal proposal was an In
crease in the income tax on corpora
tons, making II, probably, 10 per
cent.
Must Be Substantial.
The belief among well-posted men
in Congress is that there will have to
be substantial new taxes, In addition
TO the new corporation tax The
Harding Administration figured on
cutting out certain taxes. putting in
the higher corporation tax. getting
more money from the tariff. and TAX
ing care of the net loss in taxes. as
result of all the changes. by cut
ting down expenditures. The more
expert members of Congress In fiscal
affairs think the weak point, at this
time. in the Harding Administration
scheme is in the assumption that a
considerable reduction could be made
In expenses.
1t is no secret that they think that
any fiscal scheme of the Administra-
ton, predicated to a considerable ex.
tent upon expected reductions In ex.
penditures, must be revamped. The
principle as to changes in taxation
outlined by the Treasury experts may
stand, but the amount Of money that
must be raised under the proposed
principles must be expanded.