Evening star., 1925-06-26
Surplus Expectations Exceeded.

Surplus Expectations Exceeded.
1.-The Treasury surplus continues to
mount Experts at the department
now assert that at the close of the
fiscal year next week Uncle sam
may have all of $3.50 100000 to his
srredit. President Coolidge, rew
days ago, in his address to the "busi-
ness organization of the Govern
ment" predicted that the surplus
would be 5000 900 900 when the books
were closed. 1t now appears that
his estimate was too low.
The news that the larger surplus
exists is welcome. Not because the
Government has wrung more money
2. by taxation from the people than
. was expected, but because it shows
=. clearly that the time has arrived
when material cut may be made
in the tax rate and because it shows
that the country and the people gen
orally are prospecting. The returns
from the income and profits taxes in
June have exceeded all expectations.
Administration leaders who are
planning a tax reduction program
for submission II Congress when 1T
meets next December do not hesi-
tate to express their satisfaction with
the manner in which the tax pay
ments have exceeded the estimates.
Six months ago the hope was for
"a: begsarly s75,Oo0,o00 surplus at the
close of the fiscal year. But the
economy program planned by the
President and the Budget Bureau and
carried out with the cooperation OF
Congress, together with the ability OF
1he people to pay taxes because OF
s0heir earnings, have far exceeded ex-
spectations.
The Treasury estimate of the sur
Mus for the fiscal year ending June
80. 1926, is 290,oO0,00o. if there
should be no reduction of taxes. The
President and the Secretary of the
: Treasury, therefore, in preparing
81 tax reduction measure for submis-
j.. Sion to Congress, have apparently a
zwide and safe margin. They are in
position to recommend reductions
, In the tax rates that would be caicu-
lated to lop off s400,000,ooO or even
more from the taxes paid.
The policy of economy and tax re-
aduction. which was one of the major
--pIanks of the Republican platform
: during the last campaign, mas oeeh
adhered to and has born fruit. From
a anoIitical point of view, could there
he a stronger argument with "hlcn
to go to the people in the congress
sIonal elections next year than the
tuldllment Of pledges of economy ana
z,ax reduction Naturally, the Re-
publicans are banking strongly on
the strategic position they may oc-
icupy through the enactment at the
next session of Congress OF ne"
tax reduction measure.
The Democrats could not anord 70
oppose tax reduction, If they would
1,beir effort will be to outdo the Re-
.,n,,b,icans in the matter of reduction
In rates on the smaller incomes and
businesses, and to proclaim to the
country that the Republicans are
seeking to reduce taxes on the rich
: To a. far greater extent than on the
moor. But the tax reduction pro-
.Sosed by the Republicans will not
neglect the moderate incomes. Far
from It. But 1t will insist in remov-
ing as far as possible the penalty on
successful business also. believing
that such tax reduction must add to
the business development of the
country, which In turn will benefit
the people generally.
The Federal Government has set an
example in economy and tax reduc-
ton that the States of the Union
and the municipalities would do well
to follow The burden of State taxa
ton. in many cases, reached enormous
figures in recent years. The ease
with which tax-exempt Securities
2 could be marketed tempted many
States and municipalities to enter
Upon great expenditures, many OF
them good i'm themselves. but all OF
which must eventually be paid for
by the taxpayers. The war debt OF
the country is still long way from
settlement. and it behooves those in
authority to bear in mind this fact
when public expenditures are pro-
posed.