The Richmond palladium and sun-telegram., 1921-09-10
NO DRASTIC
TAX CHANGES
AT PRESENT
Time Element Important Fac
tor in Government Machin-
ery-Change Would Take
Five Months.
FOREIGN DEBT IS due
BY MARK SULLIVAN

BY MARK SULLIVAN
WASHINGTON, D. c., Sept lot
is not easy to make any dependable
guess as 10 what will come out of
the various conflicting proposals for
the revision of the taxes. Some of
the men who have identified them
selves with one proposal or another
are persons whose plans are difficult
TO predict
Probably the best judgment is that
no drastic change in the form of our
taxation will take place this year, but
that next year some fundamental
changes, such as Senator Smoot has
proposed, may rea sonably be expected
TO take place.
The underlying factors about taxa
ton are that, first of all, the distinc-
ton must be understood between
quantity and form-between the guam
tity of taxes to be raised and the form
In which they are to be raised
Would Hurt Efficiency
On the part of those whose will is
most likely to have weight, there is
decided disposition to decry the
idea of making any drastic change in
the form of federal taxation during
the present year. We now have tax
collecting machinery in motion and
moving with the effectiveness OF some
years of practice. Doubtless, differ
ent machinery like Senator Smoot's
would also bring the money in.
But for the present year the time Is
too short. and there are other condi-
tions that make it inexpedient to
change from one mechanism to an
other There is no time to turn
around Such change of taxation
machinery is extremely formidable
Secretary Mellon, of the treasury de-
partment, has said that it will take
five months for the tax collecting ma
chinery to adjust itself to any change.
Ina smuch as the senate can hardly
be expected to pass any kind of tax
bill before November, the probability
is that this argument of time will
weigh heavily.
No Substantial Change.
What is likely to happen is that the
tax bill passed this year will not be
greatly different in form from the tax
bill which is now in operation. The
house draft for a new bill differs from
the existing statute much less funda-
mentally than Senator Smoot's pro-
posal.
II is likely that the new bill to be
passed this year will not vary greatly
from the bill as it has already passed
the house. Thereafter, the plan will
be to make new and thorough going
revision next year-a revision which
will go to the heart of matters, which
will probably introduce some form of
sales tax, and will greatly reduce the
amount raised through the income
tax.
Before any real revision Of federal
taxation can be made, three things
must happen. and it is hoped that
these three things will either happen
or be brought about within the com
ing year.
Would Extend Loans. ....
The first of these is the refundins
of the Liberty loans, so as TO give
them a much longer maturity. The
present maturities of most of the Lib
erty loans is very short, in the con
templated refunding operation, these
maturities will probably be extended
to as much as so years on the theory
that it is not fair to make the present
generation pay the entire cost of wal
which was fought in part at least. fol
the benefit of the future.
This refunding operation should re
SUIT, II dIe idNOi IL
some reduction in the interest rate
and a considerable reduction in the
sinking fund payments. This is the
first of the reductions in taxation
which will be effected some timt
surely and which it is conceivable
may be possible during the coming
year
Refund European Debt.
The second thing which must hap
pen before any thorough-going change
can be made in our tax collecting ma
chinery is the refunding of the tel
billion dollars now owed to US b!
European governments. These loan:
! are now in a form analogous to de
I mand notes.
Obviously this is an inexpedien
form because the debts could not pos
sibly be paid if the United State
should demand them. In fact, ou
debtors have not been paying the in
terest on these loans and there is nov
an accumulation of Is per cent o
overdue interest
The annual interest payable oil
these foreign debts is half a billiol
dollars, a sum which, if paid. woult
enable US to make a considerable re
duction in our domestic taxation. |
is hoped that within the coming yea
these foreign debts can be refundet
in such form and with such rat
OF interest that our debtors can begil
TO pay their interest
Cut Down Military Expense
A bill giving Secretary Mellon th
authority to arrange this is now penc
ing in the senate. There is much or
position to it but the probability
IL will pass within a reasonable time
The third thing which may be e2
pected to happen under favorable eli
cumstances during the coming year
CONTINUED on Page Eleven