New Britain herald., 1923-02-10
LOWER TAXES NOT YET M SIGHT.
 E CHEERLESS NEWS FROM BABSON
Satiscian Reports On Tax Situation in Washington For
 Business Men and Investors.

labor and in every country where money Is cheapest business Is at its worst, Prosperity Is really the result Of initiative courage and hopefulness, These intangible hut all,lmporiani forces are the result Of encouraging business We cannot get prosperity by putting a hall and chain on the enterpriser,
 "Inheritanee taxes may he inereas- cd without affeeting business con gress may even increase the tax on incomes from stocks and bonds with out hurting the farmer. but a re- enactment of the excess profits tax, which paraiyzes efficiency. enterprise and initiative would be distinctly harmful to all sections of the eonn- try and to farmers. businessmen, and wage workers alike,
 These figures on government re. ceipts and expenditures have a direct relation to investors. They mean that the present demand for non.taxahie bonds will continue. good many people who have their money Tn tax. able securities have continued to hold these securities and pay tax on them with q subeonseious hope that some time. some day. some how, some where. their taxes would be reduced statistical study of the situation leads one to believe that higher taxes are here to stay and that 1t will De real feat to keep them down to pres ent figures.
 Ar interest in tax-exemrt secnri- \. hU n n- stitutionai amendment preventing the sale of any more 'tax-eSempts.' A resolution to this effect Is before con gress at the present time. If 1t Is passed, it will go before the states for ratification. It will be q long time, however, before such a bill will get the necessary two-thirds of the states to sign it, that 1t may become con- stitutional amendment Even 1T en- acted it. of course, could not be re- troactive and cannot affect the tax exempt securities already issued. The very agitation may tend to bring out rush of new issues which will nave depressing effect on the municipal bond market in spite of the strength ening. tendency which many people expect.
 "All this means" concluded MT. Babson, that the very large investors will continue to hold tax-exempt se- curities but there is no reason why the average investor should stampede to secure such issues. The bond crop is one crop that has never yet been known to fail. Many people believe that owing to the improved conditions, money will be much higher and that all bonds will decline in price during l. the next few months. This may De true. but I seriously doubt it. Al though the Babsonchart stands today at three per cent above normal, | which would ordinarily signify that we are entering another period or ln- hation, a statistical study strongly suggests that this present optimism figure is only temporary. The grea' f read iustment which started over. two years ago is only about 60 per cen. complete. My prediction is that bono prices in 1923 will average about the same as the bond prices in 1922, ano the 'tax-exempts' will follow the gen. eral market.
 Tt will be safest for investors tc count on present high taxes continu- ling, even if congress has sense enough not to reenact an excess pronts tax.