The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1922-04-05
MELLON SHOCKS
MONEY SPENDERS
Drop of S215, 900, 900 In Tax
Collections Promises
Heavy Deficit
TAXATION RATES
MUST BE RAISED
Republicans Alarmed at Political Eff
fccts This Deficit Independent of
Soldier Bonus Burden-Only Strict
est Economy VIII Prevent More Taxes
BY DAVID LAWRENCE.

I
| est Economy VIII Prevent More Taxes
BY DAVID LAWRENCE.
| Especial Dispatch to The Reformer)
Copyright 1922.
! WASHINGTON, April 5.-Secretary
| Mellon has dropped another bombshell in
/ the halls of congress. He has officially
1 disclosed that S215,0O0,000 less viii be
available from tax collections during the
/ II months beginning this July than was
! estimated in the budget. This means
| that unless congress finds ways to cut
down some of the estimated expenses con
tanned in the 1923 budget the American
people will be asked to pay higher taxes
Congress has been hoping that at the
fall elections some kind of showing could
be made that would prove the Republl-
cans had reduced the tax burden. The
prospects now are that on account OF the
falling off in business the tax collections
will be so much less than was anticipated
that the government Will face dehclt
which in normal times would be regarded
as unprecedented. 49,
This deficit will arise irrespective of
whether congress enactS bonus law ana
provides compensation for ex-seryice men.
The only difference in the case OF the
bonus is that the deficit will be much
larger. For several weeks there has been
talk of using approximately S20oOo0.Ooo
/ expected to be paid by Great Britain as
interest on the war debts to America as
a basis for the issuance of bonus certltl-
! Gates Until Secretary Mellon announced
/ that there had been a shrinkage of re-
| ceipts from tax collections the plan has
| encountered little opposition except that
! President Harding has Said he would not
/ sign a bonus bin unless it were definitely
/ established where the funds could be
raised and treasury officials insist there
is no certainty about the British paying
any interest money this year.
That British Interest Money.
The treasury has also insisted that if
the British did pay their interest the
money should be applied according TO law
to offset the equivalent in taxes imposed
! on the American people at present for the
interest on the allied war debt. n total
of nearly half billion dollars Is required
annually to meet the coupons on govern
ment bonds issued during the war The
experts have been figuring that the Brit
| ish payments would cut down that
amount considerably and enable the gov
| eminent to give the American people the
benefit of the reduction on their next
| years tax bill. .--z
But all this has suddenly been swept
aside by disappointing figures issued by
| Secretary Mellon. Nobody. of course.
1 could estimate exactly what revenues
! would be obtained from tax collections
and there is really no responsibility on
| the administration for the tentative Ing
! ures it used in the budget to cover esti-
/ mated receipts. Now, however. when a
! more comprehensive knowledge of the eX-
act receipts available from internal rev
/ enue is at hand, congress cannot spend
| as mach as was estimated would be pos
sible The budget itself for 1923 showed
La of o.
4 ceiptS of approximately S6T .uu0betU and
4 congress has gone ahead in one house at
/ least and appropriated sums not called
/ for in the original budget. 1t Is true the
senate has not tackled these bills yet and
| ii is fair to assume that the S215.0OO. 900
| shrinkage in tax receipts will carry CON
siderable weight when congress as
whole reached a final decision on pend
| ing measures.
Republicans Alarmed.
The effect on the autumn campaign is
/ admitted on all sides. If the Republican
/ party adjourns congress with the prospect
of being compelled to revise the tax laws
upward to meet a deficit, the Democrats
| Will make a political fight out of It.
Furthermore. if the British government
doesn't pay its interest and bonus bill
/ has been enacted into law, the necessity
for higher taxes will not be denied Al
together Secretary Mellon has just writ
ten an Important chapter III Tue govern
\ ment's fiscal history for the year, and if
the truth be known the leaders of con-
/ gress, who were so sure the deficit would
be trifling, are now somewhat concerned.
Practically all the sources of taxation
have been tapped and the alternative is
j higher rates from existing sources. When
Il all the facts are digeSted in congress and
4 when Secretary Melons disclosures are
fully studied. there will be a wave of
I economy sentiment not merely with re-
Spect to the army and navy but other gov
eminent projects Nobody with political
+ experience here seriously believes the Re
publican congress viii venture to go to
the Fountry with an unbalanced budget
and n big deficit.