Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-04-26

estimated by the bureau of the
budget. This means that congress
has made appropriation on the
basis of an expectation of $l,700,-
100000 in 1922 from these taxes.
In other words. the money already
is spent. 1t is not now possible for
congress to levy more taxes which
can be collected this year to make
up for this hiatus between the
estimated revenues and the money
appropriated. There is a definite
gap.
The only recourse of the gov
eminent, therefore, is to borrow
money from the public with
which to carry on government
business and meet the bills con-
tracted by congress through APP
preparations. The treasury will not
issue any long term bonds, such
as the Liberty bonds put out
during the wear. but will effect its
borrowing to meet this emergency
by selling to the public short
term obligations known as treas
ury certificates Of Indebtedness.
A Simple Parallel.
To put this in simple terms
within the experience of the man
in the street, assume a man has
started the year in the full ex-
pectation of having an income at
the rate of $4,000 year through
the ensuing twelve months. He
has contracted expenses on that
basis which will use up the full
$4,000. Later he discovers that
his income will be only $4,000.
He has signed contracts to pay
the full $4,000. He cannot get
out of them. He must borrow. He
| expects to do better the next year
and therefore does not desire to
obligate himself to pay interest on
| his borrowings for a long period.
Therefore, he signs a promissory
note for a year.
In the larger national sense, a
treasury certificate of indebted
ness merely is the nations prom
issory note to tide the govern
ment over until it can balance
its budget-that is, have expenses
and income equal. These certifi-
Gates of Indebtedness will be sold
by the treasury to banks, cor
porations, individuals or any
one who will buy them. The
showing of the March Is tax in
stallment means that 100000
900 in these certificates must be
sold between now and next jan
uary.
The treasury, in estimating the
income for this year, took into
consideration the business de-
preston, but it seems it did not
realize how far short income had
fallen. The previous year the rev.
enues from these taxes had
amounted to s3,22S,137,000. This
sum was practically cut in two
in making the estimates for 1922
but it seems the income of the
country has been cut even more
than that. In 1920, the income anG
profits taxes amounted to 49,.
1896, 000-nearly four billions
To visualize how much the ma,
tional income has dropped since
1920, the boom year, contrast thi
figure of $3,956, 900 for 1925
taxes with 1,500,000,000 the re
vised estimate for 1922.
Not Due to Lower Rates.
Some of the reduction can b.
accounted for by relaxations il
rates but not much, as the princi
pal relaxations do not go into eff
feet until next year. The Marcl
is, 1922 tax installment of les
than $500, 100000 compares witt
payment of $728,000,000 OF
March Is, 1921. The March 1
payment in 1920 was over 81,
900, 100000.
Usually the March Is payment
being the first one of the fou
tax installments, Is the largest
Under the income tax law, a tax
payer may pay his entire tax TO
the year on March Is, or may pa,
one-quarter of his annual tax oil
that date and the remaining three
quarters on June Is, September /
and December IS, respectively
This year, however, so many tax
payers upon figuring their income
discovered their total amount O
tax liability was so low that the,
could afford to discharge the ell
tire obligation on March IS, an,
have the job done with. There wa
an unusually large number of sucl
full payments this year. Possibl
as much as a third of the year
income already has been paid Il
and the years revised estimate
will fall substantially below 81,
500,000,000.