Evening star., 1924-11-13
VETO Of TAX CUT
BELIEVED UNLIKELY
Coolidge Is Seen Leaving
Reduction Issue in Hands
of Congress.
ny DAVID LAwREN CE.


The administration has decided to
leave to Congress to decide whether
a horizontal cut of 25 per cent In
income taxes shall be put through at
the short session beginning in De-
cember and ending in March.
There are several reasons given for
declining to recommend a tax cut but
at the same time no statement is be-
ing male that the President would
veto a joint resolution to provide for
a reduction in taxes.
Senator Smoot, chairman of the
Senate Finance Committee, is in favor
of such a resolution. In the House
no doubt will appear a similar senti-
ment. The Treasury Department
knows that in its last experience
with Congress. the Democrats and
insurgent Republicans united to fg-
more the essentials of the Mellon plan.
a recommendation from the Treasury
starts with certain hostility.
The Treasury is having its battles
with the CouZens committee about
the efficiency of the Internal Revenue
Bureau and altogether the admins
tration is disposed to wait for action
by the Congress elected last week
which will either convene in Decem-
Der, 1925. or earlier if other prob
lens not now foreseen require a spe-
cial session.
Treasury officials are saying that
they don't know how the present law
Will operate and that first receipts
will not come in until next March,
but the actuarieS Of the Treasury, on
the other hand have been accurate in
their estimates in the past and there
is no doubt that the administration
would not veto any proposal to make
20 per cent cut once it passed both
houses.
Tax Issue Paramount.
Politically, the tax question has be-
come almost paramount and there
will be plenty of opportunity for in
dividuals in Congress to place them
selves in a position of being even
more anxious for tax revision than
the administration. Action at the
session beginning in December, 1925
would mean that the taxpayers would
get the benefit of the reduction when
they paid their taxes during the year
1926 which is another election year
Some administration leaders think II
is wiser to revise the tax law for that
occasion so as to help keep the Re
publican Congress in power than it
is to make a cut in the coming winter
session.
From some aspects Congress is
likely to endeavor to cut taxes not
only next winter but in the session
of December, 1925. The first, of
course, would be a horizontal cut and
is not difficult to manage, legislatively
speaking, especially since the detail
ed revision must be postponed until
the present law is longer in opera
tfon.
II seems logical to expect the DEM
ocrats and insurgent Republicans to
take the initiative if the regular Re-
publicans do not 1t will be remem-
bered that the Treasury did not in
itiate the last 25 per cent cut, but
that Il grew out of proposal in
the ways and means committee by
Chairman Green, but it was promptly
given the approval of Secretary Mel
lon and the President.
Revenue Yield Large.
So far as the productivity of the
present tax law is concerned. the
Treasury is conservative in It's estf-
mates. but this much is known-the
administrative provisions of the new
law Will bring in more taxes than
was originally expected Better
business conditions this year will be
another factor.
The director of the Budget Just now
is working on his figures for publica-
ton just before Congress convenes 1t
Is possible for the Administration to
allow the estimated expenditure to
come up close to the estimated reve-
nues and wipe out the much-talked
about surplus. All data heretofore has
indicated that surplus was inevitable.
The President is attempting to cut the
budget down. When the figures are
disclosed Congress. as well as the coun-
try, will discover just what surplus
may be expected. Then it will be I'D
TO Congress to say whether it shall be
spent or refunded to the taxpayers on
tnelr income taxes payable next
March.
Copyright, 1924)