Evening star., 1925-03-01
TAX XREFUND YEARLY
URGED BY MADDEN
Bill Provides Surplus Must Be
$5O,OO0,OOO Before Re-
endorsement Is Made.

Refund of taxes whenever the sur
plus in the Treasury reaches more
than $50,000,00O, but with no refund
of an amount less than 81, and with
the President authorized to direct that
such surplus be distributed. is pro-
posed in a bill introduced in the
House late yesterday by Chairman
Madden of the appropriations COM
mittee.
Declaring that the individual and
corporation income, taxpayers bear
the great burden of direct taxation,
. Representative Madden said that he
has long felt that they should be
given a chance to have the benefit of
a tax refund whenever there are in the
Treasury funds sufficient to warrant
1t.
1T is proper that they should
have it because a surplus nor
mally would come about as a result of
more money having been taken from
them than the Government expenditures
subsequently demonstrated was neces-
sary," said Representative Madden.
THE bill which | have introduced is
quite simple" he continued, and pro-
Vides that whenever the President at
the beginning of any governmental fis-
cal year finds that there is a surplus
for the fiscal year which has then just
closed that will not be needed to meet
the ordinary running expenses of the
Government, he shall issue proclama-
tion to. that effect and state in the
proclamation how much of the surplus
he believes can be safely refunded.
He shall also state what per-
centage that amount is of the total
amount of income taxes shown by
the income tax returns filed during
the fiscal year in which the surplus
occurs and then each income tax
payer would be entitled to an allow
ance, either by way of refund in
cash or by credit on the unpaid in
stallments Of income tax, of the same
percentage of his income tax during
the year in which the surplus occurs
Would Limit Payments.
"The authority of the President
could, not be exercised where the
amount to be refunded was less than
$5O,00O,000. These credits or refunds
would be made under the same con-
ditioIs and circumstances as the %
per cent allowance granted by the
revenuei act of 1924, except that no
allowance would be made where the
amount was less than 81"
AS an illustration of the practical
sentative Madden said: Suppose that
the President found that there was
surplus of S1o0,000,000, of which s75,-
100000 would not be necessary for
governmental purposes He would
then obtain the aggregate amount of
all income taxes shown upon the re-
turns filed during the fiscal year in
which this surplus accumulated. We
Will assume this amount to be $780,
000,0 The amount to be refunded,
SIS, 900, 600, is per cent of the aggre-
gate amount shown by the tax re-
turn. An individual who made a re-
turn of $500 in tax would be entitled
to an allowance of credit or refund.
The limiting of the amount of sur
plus which may thus be distributed
to a minimum of s5O,000,00O is a prac-
tical question" Representative Mad
den emphasized. The returns show
approximately 100000 taxable in
comes. A distribution of $50. 600. 900
would mean an average refund or
credit of SO. The sum of $4,000. 900
is the very lowest amount that should
be attempted to be returned. Perhaps
1t should not be as small as that, as
there are many questions of admins
tration which must be taken into
consideration, and in view of these
the minimum should be a sensible
figure.
Il believe" said Representative Mad
den, that the enactment of permanent
legislation of this character would have
an exceedingly practicable effect. 1t
would in no wise interfere with any
necessary tax revision which the Presi-
dent and Congress might deem advis-
able. 1t would be rather a helpful
means toward that end by furnishing
authority under which relief could be
Immediately furnished while waiting
for permanent law. 1t would have a
salutatory effect on the taxpayer and
he would be perhaps more insistent, if
that be possible, upon the affairs of the
Government being conducted in an
economical manner if by y'that conduct
it would be possible to aid in bringing
about surplus in the distribution in
which he would participate.
THE existence of a surplus in the
Treasury too small to be made the
basis of general tax revision, but
large enough to make attractive the
enactment of new laws imposing ad-
ditional expenditure obligations, is not
conducive to the best financial man
agement," Representative Madden
warned, whether for the Government
or the individual, in that which makes
necessary the exercise of caution,
prudence and common sense in the
expenditure of money or in laying
obligations that will result in ex-
penditures.
The bill does not take from Con-
gress any of the rights which lawfully
belong to it in connection with the
levying of tax. They will remain in
violate. 1t does provide, it seems to
me, q simple and comparatively in
expensive administrative method by
which those who bear the great bur-
den of direct taxes may occasionally
get a dividend check. L believe the
psychological effect of such action
would inspire the people to a greater
interest, in the manner in which the