Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-02-18
SOLDIER BONUS DEAD
UNLESS FARM BLOC
COMES TO RESCUE
Maneuver Of Harding Con-
sidered One Of ShreWdest
Bits of Strategy in Recent
Years
BY DAVID LAWRENCE
(Leased Wire Service to The JournGl.)
DOWNRIGHT 1922

soldier bonus with its multitude OF
lives is dead again. r.
Whether it will bob up once more
depends upon the agricultural bloc,
which group never had more friends.
politically speaking, than. it has to-
day. For the agriculturalists, who
from the first have opposed sales
tax as a means of raising revenue,
are not likely to accept it as the
best way to pay the soldier bonus
and President Hardings ultinnatum
to the congress Of the United States
is final-eitber pass a sales tax or
postpone the payment OF the bonus
indefinitely.
The maneuver Of the chief execu-
tive is considered one Of the shrewd-
est bits of strategy Of recent years.
1t was a political situation which
troubled Mr.. Harding from the be-
ginning by his own admission and
it is a political situation which he
has created as a means Of extricat-
ing himself from the dilemma
which his party leaders forced upon
him.
Mr.. Harding does not believe a
sales tax can pass congress - he
feared as much in his letter to Chair
man Fordney of the house ways and
means committee. The canvass of
the house on previous occasions in
dicated that the sales tax did not
have more than eighty votes and
the strength Of the proponents of
the scheme is not any greater today
than it was.
Objections to Sales Tax
The objections to a sales tax. are
multiplex. Nobody ever has worked
out q plan for q sales tax on which
all economists could agree. In prin-
ciple, the plan has received. enthu-
siastic support but in formulas Of
application there have been wide
differences Of opinion. &.
In fact. few men in congress Or
in the treasury department today
could give a definite answer to
what is meant by "sales tax
Here are the various proposals.:
First, general tax on 1panufac-
turers and producers collected at
the source, but admittedly passed on
to the retailer and finally the con-
sumner.
Second, a tax OH retail sales only
also passed on to the consumer.
Third turnover tax on all things
being q tax of a small per cent on
gross receipts. This also would be
passed on to the consumer to pay.
Fourth. tax on well-def1ned
list Of commodities. This would be
reflected in the final prices Of goods
bought by the consumer.
Many advocates Of a sales tax
make no bones about what they
mean by a sales tax and frankly
call it Consumption tax" That's
why the spokesman Of farmers and
laboring folks here have fought the
sales tax. They believe it will mean
a higher cost Of living for the aver
age man--that it will give the sellers
of commodities an opportunity to
increase prices beyond the amount, OF
the tax.
Means PostpOnement
The fear is that the curve which
has started downward on the cost
of living chart will turn upward
again. There is small chance of the
agricultural bloc agreeing to tax
which might mean more taxes on the
produce of the. farm and a higher
cost to the farmer on the things he
must buy for his farm and family.
In a nutshell, therefore, the presi-
dent has proposed a, solution which
means poStponement Of the bonus
| payments. The sales tax cannot
gather enough votes to pass congress
unless all other taxes are repealed
and the whole revenue bill is revised.
AS a substitute for all taxes it had
many friends. AS an additional means
of taxation. especially in the midst
of a business year fraughtNwith SO
much uncertainty anyhow, hte
chances are congress will accept
President Harding's formula-+a sales
tax measure will be proposed and
| shelved and the bonus will be post
poned.
The certainty Of a presidential veto
amy bill providing for direct taxes
- a revival of taxes already re-
7 pealed or for bond issue, has
changed the whole situation. Con-
greSs has not wanted to pass a bonus
bill. Political pressure from the SOL
| der vote stirred both houses. Now
political pressure from business in
! terests on the one hand and the con-
sumers on the other is turning con-
gress away from the bonus. The
have been passed if the agitation
had come to a head when congress
was considering the bonus bill last
autumn. President Harding has
! promised to make recommendations
for revision Of the revenue bill.
| This will come after the congress
| sional elections next November. I'm
less all signs fail, the bonus is
doomed to slumber until late in the
year 1922.
HARDING FAVORS SALES TAX
| TO PAY SOLDIER BONUS
WASHINGTON, Feb. 17.-Presi-
| dent Harding informed congress to-
day he considered a general sales tax
the only feasible method of raising
funds for a soldier bonus.
The executive, in a letter address
! ed to Chairman Fordney, OF the
| house ways and means committee.
suggested that unless congress saw
| fit to enact a sales tax the passage
Of bonus legislation should be tenn
porarily postponed.
II believe" the president wrote,
| ''the American people will accept the
| lazy Of a general sales tax to meet
| the proposed bonus payments, and
we should contribute thereby no add
| ed difficulties to the problems Of re-
adjustment. If congress will not
adopt such a plan it would be wise
tC let the legislation go over until
there is a situation which will justi-
fy the large outlay" -
Declaring that the government HAD
under consideration the disposition
of surplus war properties and other
| transaction which should bring
| great relief to the treasury, the
president said it would be wise to
\ let the legislation go oXer if congress