The Washington herald., 1921-01-10
Smoot Tells Harding the
Limit of Tariff. Is
$5OO,OOO,O 900.
SENATOR EXPLAINS
REVENUE PROGRAM
Protection to Business
And Labor Will Be
Objective.
By SAMUEL w. BELL.

A<NNNAO-NE SAASs - oLs CeAONAAN
elect Harding today received from
Senator Reed Smoot, of Utah, little
or no encouragement that taxes on
business and capital can be aban-
doned by the incoming Republican
or replaced as a
source of revenue by a high protec-
tive tariff.
The Utah Senator, regarded as an
expert on financial legislation. be-
lieves the new administration will
be forced to retain the inheritance
tax, although the latter should be
greatly reduced and modified to
eliminate it's present absurditfes.
From the tariff Senator Smoot esti-
mates no more than $500. 900. 900 an
nually can be safely raised, an opin-
ion upon which President elect
Harding is finding surprising agree
ment among Republicans even of
the most pronounced high tariff
type and in which he himself is
apparently willing to concur.
In going over his program for
revenue reform. Senator Smoot made
it plain that his ideas coincided
with those of the President-elect
and designed to carry out the Re
publican campaign pledges to light
en- the present burdens borne by
business as the result of the in
equitable tax laws applied by the
present administration.
Discussing his program today
Senator Smoot said:
Urges High Rate Reduction.
Il think the higher rates Of the
excess profits tax should be re-
duced. 4 careful computation shows
that when these rates get above a
csrtssn percentage they cease to be
productive because there are ways
for keeping profits from being so
large. The tendency then is to put
capital into the vast amount Of tax
exempt securities that are in eX-
istence / have 4 computation which
shows that whet the peak Of eX-
cess profits goes above 80 per cent
IL becomes profitable to avoid it by
transferring investments to this
class Of securities This is mathe-
matically demonstrable and ! would
like to see 80 per cent made the
limit, though / am doubtful wheth-
er Congress will be willing to place
III below 40 per cent.
"As illustrating how earnings OF
capital will inevitably be lessened
when the tax burden is too high IL
is found that the number of people
reporting annual incomes OF *l'OOV'-
600 or more is now only about one
fourth what 1t was at the highest
point"
senator Smoot discussed the in
heritance tax, saying IhaI ne
doubted II it could be done away
with. but expressing his conVlction
that as it is really tax on caplIa !.
rather than on earnings, Ii must
inevitably be serious ourdeh "'t'S
affect can only be unfortunate
Senator Smoot also discussed tle
plans of departmental reor
ton. aiming to do away win 9upI'-
cation and waste in the admlnlstta-
tSHa adenartments.' He explained that
Congress had already provided Tot
a ioint Congressional commission
which will begin work at once sur sur.
yeying the departments In my
idsument" he said, 1.-THE proper re,
adjustment in these regards "lIl
save the, government about *-OO'-
000, 900 a year
Approves Meeting of Electors
President-elect Harding has given
his spproyal, to the unique proDosal
of the twenty-four Ohio electors
who called upon him yesterday pre-
naratory to the official election
which will decide in every state In
the UnionetomOrrow when the. eIec-
tors meet formally.
| The proposal was that the entire
electoral college, composed OF sSl
members, meet in Washington on
March 4 for the first meeting OF lts
kind the body has ever held. The
meeting would have no legal sig
nifcance, of course, because the
electors under the provisions OF the
Constitution are required to cas'
their ballots in their respective
States tomorrow.
The Ohio electors believe, how
ever 1t would be interesting to
bring the membership of the college
together, and their inquiry into
facts convinced them that 1t had
never been done before.
Copyright, 1891, Public Ledger Co..