Evening star., 1923-10-19
SMOOT DENIES TAX
CUT OF S5|lD,ODO,O|D)
Saving of 100000, 900
Likely, Provided Bonus or
Building Bills Not Passed.
BY DAVID LAWRENCE.

Senator Smoot, chairman of the
Senate finance committee, today gave
the writer his reasons for believing
1T unwise to press for tax revision at
the coming session of Congress. Mr..
Smoot has an engagement tomorrow
with President Coolidge, who wants
to know the Utah senator's views be-
fore his first address to Congress.
Il did not say the other day." said
Mr.. Smoot, that s500,0O0,000 could be
Topped off our income taxes. 1 simply
pointed out that we could reduce our
taxes by s200.000,000. This means
that If we do not have a soldier bonus
bill, If there is no public buildings
bill, and If We cut down government
expenditures, 1t would be possible to
reduce the amount of our appropria-
tions by s300.000,o00. This would
leave S100,000,000 to be raised from
sources other than taxation and l was
taking into account the $4,000, 900
of interest which we are pledged to
receive from Great Britain on the
war debt. thus leaving a surplus of
about S75,000,00O.
Many Flaws in Law.
Now. that's a different thing from
adding the cut in taxes and the cut in
appropriations to make an imaginary
saving of s500,000.000
MY position with reference to tax
revision is simply this: 1 would be
delighted to see the revenue laws
amended. There are dozens of imper-
fections in the wording of the law
for instance, which ought to be cor
rected. L would favor also the re-
moval of discriminatory taxes such
as those that are imposed on candy,
jewelry, kilograms and special classes
of business.
But this is a campaign year and if
we open up the tax question there
will be politics in 1t from beginning
to end. The House might pass a bill
with certain changes in the law, but
the radicals in the Senate might be
able to insist that 1t all be stricken
out and substitute measure enacted.
Now what the radicals" are likely to
propose is a revival of the excess
profits tax.
Opposes Surtax Raise.
'They also want to increase the
rates on surtaxes from 40 to so per
cent. Every business man who has
studied this question at all knows
that to make such an increase would
discourage investments and generally
depress the prosperity of the country
through the i'll effects on the busi-
ness world.
Even today there is complaint
against the present surtax rates, and
1 haven't a doubt in the world that
ifs we reduced our SurtaxeS even to
25 per cent the government would
nn1lorf than If iG HnllnNf-
ing today at 40 per cent rates. Busi-
ness men will not develop their mar
kets or increase their volume of
transactions If they have no incen-
tive or if they feel they must give
practically all of their profit to the
revenue collectors.
Business in America ought to have
a chance to breathe. 1t is useless
to upset the business world with a
promise of a cut in taxation If you
know that the result is likely to be
worse for business than what you
have at present.
Sees Bonus Certain.
LAS for the bonus, 1t is bound to
come up and seems certain to be
passed. There is no way of esti-
mating what the bonus will cost,
though, taking the average of the
various plans suggested, 1t is believed
the whole thing VIII amount TO
S1,250,O00, 900. If there is to be a
bonus bill there can hardly be tax
reductions"
Some of the proponents of tax re-
vision are saying to Senator Smoot
that If an unsatisfactory bill is
passed by Congress the President can
always veto 1t and no harm done. be-
cause the radicals couldn't muster
a two-thirds vote to make it a law.
But, on the other hand, Mr.. Smoot
thinks the political consciousness of
such a veto would be fatal. as 1t
would put the administration on the
defensive throughout the campaign,
business would have been upset by
the uncertainty which always at
tends a period of tax debate in Con-
gress, and no relief would be forth
coming to anybody. That's why the
chairman of the Senate finance COM
mittee says Let well enough alone" "