Evening star., 1923-05-11
LOWER TAX HOPES
RAISED BY NEW
Treasury Officials Thinking
of Recommending Down.
ward Revisions.
BY DAVID LAWRENCE.

Postmaster General Harry News
hint in his Ohio speech that the un-
expected may happen" in the form of
| reduction Of taxes next year Is not
based on any definite conclusion
reached as yet by the fiscal officers of
a tendency which may in the end
Justify the prediction Of lower taxes.
1t was learned today that officials
of the Treasury have for some
months been thinking that they might
recommend in the autumn general
have not felt warranted in making
any announcement along that line
because the facts on which they can
base recommendation are not all
available and there are some uncer-
tain factors in the situation which
must still be considered
Unquestionably the whole atmos-
phere is one OF optimism and hopeful
ness, not alone because of the knowl-
edge that any reduction in taxes.
however slight, would be welcomed
by the American people. but because
of the certain benefits that the politi-
cal folk think would accrue II the re-
publican party could enter the next
campaign with a definite promise of
lower rates.
Two Reduction Theories.
There are two theories on which re-
facts should be found to justify such
step. One Is that the reduction al
ready made in the higher brackets Of
the surtax has proved that the gov
eminent gets more money by lower
ing the rates than by keeping them
at a prohibitive position, which rem
dcrs no incentive to earn money for
the federal government and diverts
billions Of capital into tax-free cham
nels such as municipal and state Sc
curities.
The other theory Is that a general
reduction Of all taxes irrespective OF
the returns from the higher surtaxes
can be afforded by the federal gov
ernment because Of the economies In
federal expenditures as well as the
Increased totals received through COL
lections because OF better business
conditions.
The Treasury is unable to complete
its analysis until the returns are care
fully scrutinized. The Job of sorting
out the returns to determine how
much from large concerns-all this Is
vital before any judgment can be
formed as to the permanency OF the
revenue being received and whether
cut in taxes would be safe from a
government standpoint
Favorable Psychology.
On the subject Of future business
! conditions. officials here are rather
pleased at the psychological factors
which now are operating to prevent
| imitation. They point out that in the
| last imitation period nobody gave a
| thought to the possibility that good
| times might end: everybody went at
| full speed, believing the boom period
was of indefinite duration. Now,
( however, the numerous statements
, issued by leaders of industry and
| the tendency of the public to refuse
to build. for instance, while mate
| rials are high or to buy commodities
| when prices reach prohibitive levels
are their own best checks to infia-
| tion. In fact, there Is no longer any
real fear here that the American peo-
pie will find It necessary to debate
as painfully as in May. 1921.
The outlook is regarded as encourage
i ing because financial operations are on
q Sounder basis and there Is little de-
pendence on foreign demand as there
was two years ago when a collapse in
Europe had its reflex in curtailment of
| business in America. 1t Is felt that Eu-
ropean affairs cannot get much worse
and they might get better.
Broadly speaking. the Postmaster
General In his Ohio speech, was letting
out of the bag a big political move
which the administration hopes to let
! out of the bag next fall IL conditions do
not materially change, but while 1t does
look as II Il reduction In taxes can be
promised the Treasury Is cautiously re-
framing from saying how much simply
because 1t doesn't want to see the public
expectation raised to a high pitch only
to meet disappointment IL the revenues
when analysed do not justify much of
a reduction. All that can be said now
Is that II business conditions do not
undergo a material or radical change
for the worse n revision of the tax laws
will be recommended by President Hard
ing at the December session of Congress
to take effect for the year 1924, collectf-
BILE, Of course, in March. 1925, and there
after.
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