Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-08-11
POLITICAL AND ECONOMIC
WISDOM IN NEW TAX PLANS
Under the Presidents Leadership Ex-
penses Are to Be Reduced In Order
to Escape the Need Of New Taxes


TT Is becoming evident that the man in the
White House has the qualities that go
with leadership. When Congress gets public
business tangled up President Harding either
summons the chief men in both houses to n
conference. or he goes to the Capitol and
tells them what to do
The latest instance of the exhibition of
his primacy in the Government occurred this
week, when he arranged conference with
the Secretary of the Treasury. the Speaker
of the House, the Republican floor leader,
the chairmen of the Committees on Rules
and on Appropriations and the chairman and
all the Republican members Of the Committee
on Ways and Means to discuss the revision
Of the internal revenue laws.
These gentlemen had not been able to agree
on any definite program. They were aware
that the country is demanding relief from
oppressive taxes. but instead Of preparing
to satisfy that demand they we're proposing
lot Of new taxes. Even the Secretary Of
the Treasury was guilty Of suggesting new
taxes that might have raised revenue, but
would certainly have raised Cain politically.
Under the guidance of the President II
not under his orders, Secretary Mellon sub
mttcd an estimate of expenditure for next
year 5000, 600. 900 below previous estimates.
One can imagine the President saying that
the only way 10 DrlnS aDOuL IPuuCllbu
in taxation is to bring about a reduction
in expenditures. and reminding the men in
conference with him that the Nation ex-
pnctcd tightening of the tax burden. And
he may have concluded his remarks with
the warning:
"Gpntlcmcn. if we fail the voters will
give the Democrats a chance to do what
must be done.
But whatever he said he succeeded in
bringing about agreement on reasonably
satisfactory program. The first two items
in it provide for repeal of the excess
profits tax, and for a repeal of the higher
surtaXes on incomes.
The wisdom of repeating the excess profits
tax has been admitted for months. EX-
perience has demonstrated that tho heavy
surtaxes on incomes have done more harm
than good, and that the amount of revenue
raised by them was constantly decreasing.
The third item provides for a reduction
of the transportation tax by 90 per cent
dating from January l, 1922, and for its
abolition on January l, 1923. This will
bring relief where it is imperatively needed,
and it will demonstrate to every user Of the
railroads that something has been done to
redeem the campaign promises to reduce
taxation.
The fourth item calls for a repeal of the
soda water tax. including the tax on ice
cream. and the taxes on clothing and similar
articles. These are popularity known as the
nuisance taxes. This will relieve thousands
from annoying payments where the repeal
of the transportation tax viii. relieve hun
dreds.
And then it is announced that the sug-
gestions TO tax automobiles and bank checks
have been abandoned as unnecessary in view
of the economies that are to be effected
The only tax to be increased is that on
corporations, where a fiat rate of 12i2
per cent is proposed in place of the present
rate of 10 per cent. There will be opposi-
ton to this from the corporations, but
when the objectors are reminded that it is
necessary for political reasons to put the
party In power insthe position to meet the
charge of the opposition that the rich are
favored by a reduction in the heavy sur
taxes on large incomes they will see at once
the justification for the higher tax on cor
porations even if they do not think it de-
fensible for any other reasons
The new program seems to be com
pounded of political and economic wisdom.