Pueblo chieftain., 1921-10-16
TAXATION MIDDLE
IS CONGRESS- FAULT
tcontinued from Page ono,

senate finally reported its bill it did
not by any means have the prestige
and authority that such report com
monty has. A separate group of Re
publican senators entered the situation
with almost as mucn confidence as II
the finance committee had done prac-
tically nothing at all. This new group
of senators introduced ideas radically
different from the bill as the finance
committee had reported 1t. Most of
what has happened during the present
week has rested on a series of infor-
NAL conferences between the Republi-
can members of the finance commit
tee. and these other Republican sem
ators have ideas differing from the
finance committee. One large reason
for all this indecision lies in the fact
that many persons who really believe
in sales tax have not the courage to
say so. but have been hoping that the
nero passage of time would bring the
country to look favorably on that
form OF tax.
So much for the history of the bill
up to date. 1t now appears that the
bill to be passed at this session is to
be regarded not as the permanent
peace time tax bill, but merely as an
emergency measure to cure the situa-
ton created by water that has already
gone over the dam
For the decision to make the bill to
be passed at this session merely an
emergency measure to serve for the
present year and to defer the writing
of a radically different peace time
measure until next year. there are
some good reasons. II these reasons
had been anticipated by the Repub-
licans as early as last April. and had
been announced to the country at that
time, the country would not now feel
SO irritated at the situation as 1t now
stands. The reasons which Justify the
writing of an emergency taxation
M a IYra fnF ha mr. ant Ona
postponment of the permanent meas
ure until next year, are these:
First of all the treasury must have
the money. There Is now in existence
mechanism for bringing In this
money. To change this mechanism by
pesce-time measure takes good deal
of time. The mere adjustment of the
treasury machinery for collecting the
taxes through a new bill would con-
sumo about five months. Under the
circumstances, 1t is not wise to make
any radical changes. 1t Is not expedi-
ent, for example, to make such .
change as would be involved in throw
ing overheard large portion of the
income taxes and substituting Tor
them a tax based on sales, or a tax
based on manufacturers products,
such as Senator Smoot proposes.
In additiont the element of time,
there are still other reasons for post
poning the writing of our permanent
peace-time tax schedules until next
year. By next year It may reasonably
be hoped conditions will have changed
In several important particulars. For
one thing. 1T is Just possible that by
next year we may be able to refund
our liberty loans. At the present
time these loans have a short duration.
and comparatively high rate OF inter-
est Sooner or later they will
be refunded so as to have long
or terms and lower rate of inter-
est. When that Is done the amount of
taxation needed for paying the inter-
est on the liberty loans and for meet
ing the sinking fund payments may be
reduced. Whether this refunding oper-
alton can be carried out next year
depends on the course of conditions
which cannot be fully forcseen but the
erty bonds holds out some promise. II
the price of liberty bonds goes ap-
preciably above par that will be the
time to refund these bonds at a low
er rate Of interest. If that happens
during the coming twelve months the
refunding operation can be carried out
and our schedule OF national taxation
can be -rcadjusted downward accord
ingly.
Another factor wnicn may turn out
during the coming year to make a new
and lower schedule of taxation possi-
us from abroad These debts due us
from our European debtors amount to
about 3l0,000. 900. 600, and the interest
on them Is about $500. .0oo.0co a year.
This interest is not now being paid. II
congress gives the secretary OF tho
treasury authority to negotiate with
our foreign debtors he may be able to
arrange that a portion of this interest
at least shall be paid regularly. and
to that extent reduce the amount OF
our own taxation.
Furthermore, the results of the COM
ing armament conference may have a
favorable effect on this same situa-
ton. III we secure an agreement TO
reduce armament, then some of ou
European debtors may be able to di-
vert money which they now spend in
armament to the payment of interest
on the debts they owe to the United
states Also. IL we have an agreo-
ment to reduce armament 1t will fol-
low that the United states will b. en-
abled to reduce the amount of our ap-
propriations for armament by several
hundred millions of dollars. By what
ever amount we reduce our appropria-
tions for armament. by that same
amount we can reduce tho amount OF
taxation that wo must collect
IL all these things happen. VIC can
then make financial forecast of tho
conditions for several years to come,
and can estimate with greater ac-
curacy than Is nows possible. tho
amount of taxes that VIC shall need
each year for several years to come.
1t is Just as soon as we know these
facts that It will be possible to write
a new, permanent peace time schedule
OF national taxation. These are the
factors which Justify the position now
taken by the Republican leaders. that
the tax measure written this year
must be an emergency one, and that
the writing Of the permanent peace
time tax measure must be deferred for
at least a year.
Copyright, 1921. by the New York
Evening Post, Inc.)
IccIlC n[CIcIhl RIulE1lN