Evening star., 1922-02-05
OPPOSE SALES TAX
AS AID TO SOLDIERS
House Members Would Use
Part of Proceeds of Re-
funded British War Debt.
BOND SALE SUGGESTED
Higher Inheritance Tax Also Ad-
vocated-Bonus Conference
With President Planned.
BY the Associated Press.

BY the Associated Press.
Republican House leaders are under
stood virtually to have abandoned the
idea Of financing the soldiers bonus
by means Of q general sales tax, a
pfogram which has been freely dis
cussed at both ends of the Capitol.
Opposition among the majority
members, mostly from the middle and
far west. is said to be so strong as to
threaten defeat of such a program.
The alignment against it is under
stood to be practically that which
forced acceptance of the SO per cent
income SurtaX voted into the revenue
bill by the Senate.
Take Issue With Mellon.
Developments at further hearings
yesterday before the House ways and
means committee disclosed that in
spite of Secretary Melons opposition
to the plan a humber of the majority
members favor the use OF part of the
proceeds from the refunded British
debt in helping to finance the adjust
ed compensation. They believe that
this would meet with a greater meas
ure of public approval than would
program involving the raising of the
entire amount by means of special
taxes.
Arguments on both sides of the
question were heard by the commit
tee Representative Ramseyer, repub-
lican. Iowa. opposed the proposal.
arguing that such use of the money
would be breach of contract with
said, had been told in the law adopted
by Congress that the proceeds from
the foreign debt would be used to
retire the liberty bonds issued to
raise the money advanced to the
debtor nation.
Chairman McFadden. of the bank
ing and currency committee favored
the financing of the bonus through
the sales in this country of the re.
funded British bonds with the prin-
cipal and interest guaranteed by the
American government as well as the
British government. He contended
that with this double guarantee the
bonds would bring a higher price
than would American government
securities sold for the same purpose.
Urges Inheritance Tax Increase.
Increased inheritance taxes. as an
other means of financing the bonus
were advocated bv Mr.. Ramseyer,
who said such taxes could not be
passed on and would not be penalty
on initiative and enterprise. He
thought the present return, of $751;
oO0. 900 from this source could be in
creased to 5000, 100000 year without
imnosine any hardship. Chairman
Fordney and some other members of
the committee apparently received
this suggestion without approval, but
other members indicated sympathy
with 1t. =
Now that the arms conference has
arproyal the naval limitation treaty,
some committeeman are studying the
aubiect of naval and army reduction
as one means Of providing revenue
for the bonus. Because of the cost
of scrapping ships on the ways. they
are not at all certain that the build
ing appropriation can be greatly re-
duced in the next fiscal year. but it
IA their thought that with many ships
now afoat consigned to the scrap
heap. the personnel can be cut down
L,,,, affectine a considerable saw.
ing.
This phase Of the situation is ex-
neeted to be among those to come up
Mt the forthcoming bonus confer
ence between President Harding and
House and Senate leaders.
8. Lovenbean Of .Washington,S edi-
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