The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-08-10

Washington, Aug. 10.-In the first
clear-cut clash between the legislative
and executive branches of the govern
ment under the Harding administra-
ton, congress has emerged with a de-
cisive victory over the treasury de-
partment.
AS a result, federal taxes this next
fiscal year are to be approximately IS
in the United States under the provi-
sions of the new tax revision program
which the house ways and means
committee began drafting today.
Income Is Reduced.
There will be a reduction of $780,
900, 900 in the governments income.
Whether the reduction in the govern
ment's out-go will be that large, re-
mains to be seen. Doubt was eX-
pressed today that it could be effect
ed. The treasury experts who favored
a pay-as-you- enter policy for govern
mental financing, do not believe it can
be done. They foresee the necessity
for lot of deficiency appropriations
towards the close of next fiscal year.
Regardless, however, of whether
the income equals the outgo. there
will be reduced federal taxes for this
year at least. Republican leaders of
the house and senate flatIy informed
lon that reduction of taxes this year
is necessary to insure the return of a
Republican house in 1929. Secretary
Mellon, never having stood for cleo
tive office, could not approve this.
He views the whole proposition from
a cold business standpoint-so much
was needed and so much had to be
raised President Harding did appre-
ciate it, however, and the result was
! victory for the congressional lead
ers.
To Hurry Recess.
With the Qualification of the taxa
ton scrap, the Republican leaders in
the house began today a drive to
speed up the program towards a re-
cess. 1t is hoped to get the taxation
program completed and passed with
in two weeks. Then both houses are
going to recess month, leaving the
senate committee to thrash around
with the twin problems-taxation and
tariff.
Treasury estimates of the amount
needed to run the government for the
next fiscal year will be slashed from
| $4,554, 100000 to $4.034,0OO,000, a re-
duction of half billion dollars.
The program of retrenchment in
expenses to correspond to this cut will
fall heavily on the army and navy,
and shipping board. Present plans
contemplate looping off $50,O00,00O
from the war departments allotment.
| S100, 100000 from the navy and
| 500, 100000 from the shipping board.
| This will take up about half the
amount.
Bill Ready Monday.
| Chairman Fordney said his COM
mittee probably could have the new
revenue bill ready for consideration
| by a conference of house Republicans
next Monday and leaders generally
Thought the a. a ha hlu
be passed by the house by August 90
permitting congress to recess on that
I date for a month.
Under the program as now planned
| the senate finance committee would
work on the tax bill during the recess
with the view to having it ready for
senate action when congress recon
Vened. This would permit official
passage Of the tax bill ahead of the
permanent tariff measure, a program
it was explained, which the president
desired to have carried out.
The great bulk of the taxes which
| it is proposed to repeal would come
off as of last January l, these being
the excess profits tax. estimated al
S450, 900, 900, and the income surtaS
brackets above 32 per cent, which are
estimated to yield $s0,000,000.
After this year, the income tax
would be reduced to 25 per cent. en-
failing a further revenue loss next
year.
Repeal of the other taxes proposed
-one-half of the transportation taxes
\ and the so-called nuisance and luxury
clothing ievies-would become effec-
| tive next January 1. and would result
in a total loss of $1S0,000,000 in
revenue.
/ They expect the plan to cut off al
of the transportation taxes on January
1. 1923. The proposed increase in the
levy on the incomes of corporations
also would he made retroactive to last
January. The White House agreement
was for an increase of 2 n per cent
instead of per cent, making the tota-
i12H per cent, estimated to yield s125,
100000.