The Dawson news. (Dawson, Ga.) 1889-current, 1925-01-13


Extensive Tax Powers.
WASHINGTON, d. C.-With a
record OF $145,0OO,000 handed out to
the several states during the fiscal
wear 1924 Uncle Sam now is casting
about for some way in which to tight
en- the strings of his state subsidy
purse. Believing that the state aid
fund system as practiced by the gov
eminent OF the United States is bad,
not only for the federal government
but also for the state governments,
finance officials OF the nation are de-
termined to curb the rapidly growing
practice.
Strength has been given the plan by
the action OF President Coolidge, The
president in his budget estimates set
aside only $1O9,OOO,o0O, reduction OF
S56,000OOO. for state aid funds. With
this item OF the budget went the fol-
lowing message:
Il am convinced that broadening OF
this field OF activity is detrimental
both TO the federal and state govern
ments. Efficiency of federal operation
is impaired as their scope is widened.
Efficiency of state governments is de
creased as they turn over to the led
eral government responsibilities which
are rightfully theirs My conviction is
that these subsidies can be curtailed
with benefit to both the federal and
state governments.
Huge Sums Given States.
Examination OF state subsidy activi-
ties during 1924 discloses that huge
sums were given by the federal gov
eminent for the following purposes;
Various kinds of road work, $685.
000 600. forest work, Sal 100000; ma
tional guard, $19,000,000; farm work,
$8,000000; vocational education ans ana
industrial rehabilitation, S2,90ogOO;
n,,bIc health work. S1,000,000. The
rest OF the $145,000,000 was given Tor
various lesser projects, or was spent
for distribution OF the funds and the
keeping OF records.
Another fact of importance IN TINS
connection is this: The Sl4o,O0U,OOo
given by the federal government III
the form OF state subsidies constituted
five per cent of the total expenditures
of the federal government.
The principal argument against inc
state subsidy system is that 1t tends
toward a dangerous Capitalization OF
government at Washington.
The subsidy system, it is held, is
undermining the autonomy OF the
states, is multiplying government bu-
reaus and is causing the federal gov
eminent to invade fields OF taxation
that rightfully belong exclusively &c
the states.
Against the system it is being urged
that it unduly penalties the states that
nav the highest taxes. For example,
the state OF New York contributes
nearly rs per cent of all federal taxes,
vet receives only little more than
five ner cent of the money allotted as
federal aid. Nevada, which contributes
only two-hundredths of one per cent
nj the federal taxes, receives more
than one per cent of the subsidies.
Such differences are inevitable I'M
der the subsidy system, experts say
Taxes are paid on the basis OF income,
and subsidies are granted on the basis
of need.
Other Cases Cited.
New York and Nevada are extreme
cases but there are others The fol-
lowing figures show the percentage OF
federal taxes returned in the form OF
subsidies to various states: Alabama,
ia: Arizona, AZ; Arkansas, 20.82;
Georgia. lila; Idaho, 45.0S; Iowa,
10Y: Mississippi. 23.55; New Mexico,
Q8o1, North Dakota, $685. Oklaho-
ma 1341: Oregon, 1898; South Car
DINA, 1918; South DaRota' oo.z+'
Texas, 1906; Utah, l9y6; vermont NJ
1902; Wyoming, 42l4; Missouri, o'oZ'
Conditions laid down Tor the grant
ing Of subsidies provide tor close CO.
operation between the federal govern
ment and the state and gives tne leu
eral officers wide power over the Co
operating state agency. Certain OF the
state officials are virtually declared TO
be federal agents in some OF their &C
tivities.
In view OF this situation finance OF
icials of the government believe that
the only method of attack lett to OPP
ponents OF the subsidy system IS all
educational campaign against me en-
actment OF further federal ala laws
and tor repeal OF eXlstlIlg laws. -
addition, it is believed that campaigns
in the states against acceptance OF
federal aid funds would produce some
good results.
The only pending proposal Tor ad-
ditional subsidies to the states winch
appears to have any chance OF enact
ment is the Sterling bill Tor the es-
Enlistment OF new national depart
ment OF education. The bill has been
before congress for many years.
The current agitation against ted
eral subsidies, by citing the bill as
step in the extreme Capitalization IN
education, is believed to have d1min-
ished seriously its chances for enact
ment The Sterling bill, in addition to
establishing a department OF educa-
ton, provides for an annual appropr1a-
ton OF Sl00,000O00.