The Washington times., 1924-01-31
NEW TAX PLAN.
IS BLOW TO
BONUS
Will Wipe Out Big Treasury
Surplus Depended Upon
by Advocates.
By GEORGE n. HOLMES.
international News Service.


The sudden decision Of Republican
leaders In Congress not to make
the hard.pressed taxpayer wait un-
III next year for. reduced taxation,
but to make possible saving Of
IS per cent on his 1898 return has
given the Soldiers Bonus the hard
est blow It has yet sustained ct the
hands Of the Sixty-eighth Congress.
This was conceded today by even
the most pronounced advocates Of
the bonus.
The decision Of the Republican
leaders, II pushed through to On.
actment, win wipe out utterly the
$500. 100000 surplus now in the
Treasury. This huge amount Of
cash actually exists, and would not
have been affected by the tax re-
auctions which Secretary Mellon
proposed to start next year.
Was Talking Point.
Furthermore. this great surplus
has been one of the principal talk.
ing points Of the bonus advocates.
They have pointed to It a. proof
that the Government 10 In good H.
nancial condition and well able to
provide the adjusted compensation
which ex-soldiers have been de.
manding since the close Of the
war. They have asserted that the
bonus could be largely taken care
of by utiliSing this surplus, and
the taxpayer given necessary re.
lief at the same time by the pas
sage Of reduction legislation to be-
come effective with next yar'S re-
turns.
Now, az a result Of the Republi-
can decision to make tax reduction
retroactive and apply to returns
that will be made out next March,
this surplus bids fair to be wiped
out.
Doubt Of Passage.
A month ago bets Of to
could have been obtained around
the Hobbies OF Congress that the
bonus bill would pass this session
over President Coolidge's veto. To
day, for the first time, the bonus
people were entertaining serious
doubts as to their ability to put II
| through.
Their ability to pass It in both
Senate and House by large major.
tiles on its first presentation is
conceded even by its bitterest foes.
But on all sides was heard today
the prediction that not enough
votes can be found to pass 1t over
a veto when there exists no sur
plus in the Treasury to finance the
payments. While the surplus
existed there was a chance: when
the surplus disappears, as It will
under the new Republican plan
the money to pay bonus also dis
appears.
The only avenue Of payment left
in this situation would be specisl
taxation of some SORT or a bond
issue, and 1t Is not believed either
plan can command sufficient votes
to override a veto.
Republicans Gleeful.
The Republicans were gleeful to
day over the probable political ef
feet Of their decision, which was
taken without counsel with the
Democrats. They plan to capitalize
1t Immediately as a Republican
achievement, accomplished while the
Democrats were throwing mud-ballI
at the Mellon plan.
Meanwhile, the Democrats, con
fident Of their coalition strength
with the tnsurgent Republicans
plan to make their power felt ii
rewriting the Mellon bill on th'
floor and providing far greater
benefits for the little fellow" thar
Mr. Mellon proposed.
With the Republicans and Demo
Gratis fighting over who shall re
due taxation most, It appeared to
day the taxpayer "should worry"
Secretary of the Treasury Mellol
today gave his unqualified approve
; to the plan Of making the reduC
ton applicable to the 1928 incomes
Such a policy, he said, fits In wit
u the administrations tax program.