Evening star., 1925-04-10
j. s. TAX DIVIDEND
URGED FOR PAYERS
Madden Would Enlist Tax
payer in Economy Drive to
Reduce Income Rates.
BY DAVID LAWRENCE.

How would you like to become
stockholder in the United States Gov
erument-and. if conditions permit,
receive d dividend every year?
This. in effect, is the plan laid before
President Coolidge by Representative
Martin 3. Madden Of Illinois, chair
man of the House appropriations com
mittee IT works this way:
Congress appropriates the amount
that shall be spent annually and a.
the same times fixes the rates OF tax
alton. When the income exceeds the
outgo for any year the Treasury
would be authorized to determine
exactly what proportion the surplus
bears to the amounts collected. and
each taxpayer would receive a rebate
for that particular percentage as sp-
piled to his own taxes. Thus if the
annual saving amounted TO 25 per
cent this proportion would be applied
TO the amounts paid
Expects Taxpayer Pressure
Every taxpayer would he interested
under this scheme in seeing that
expenses were held down TO a mini
mum, for if no money were saved
there would be no rebate. The
budget system was designated 10
prevent expenditures from exceeding
income. Mr.. Madden'S plan would
compel further economy, so that the en-
tire amount provided for in the budget
would not be spent
There is reason to believe the idea
is favorably looked upon by both the
President and the Secretary OF the
Treasury. 1t will be pushed in the
next session of Congress.
Under the Madden plan the rates Or
taxation would remain the same un-
less Congress wished TO mako gen
eral revision at any time In fact. n
revision is expected TO be made in the
next Congress anyhow, and the Mad
den proposal would simply be at
tached to it and would be effective
whenever there was a surplus.
Believes Pinn is Valid.
There IS no doubt Of the consti-
tutionality OF the proposal" said Rep
resentative Madden, as we do not
delegate any power, but simply pre-
scribe what the Secretary OF the
Treasury shall do with the surplus In
any year"
Every Congress hass the right to
repeal the acts of its predecessor, so
| the measure would not be binding
| unless future Congresses kept II on
the statute books. This, however, is
Democrats when last in power fixed
the rates for two years succeeding
and the Republicans did not feel it
wise TO repeal them. Precedent for
such an automatic provision in law
can be found. Whether the politicians
will like the scheme, however, is an
| other question, Is il does limit their
freedom OF action when they do wish
to appropriate for political purposes
Thus il the country were operat-
| ing under a fixed ARRANGEMENT for
I a few years, and then another ad-
ministration came into power the
latter would be compelled to accept
the standard of its predecessor or
taxes by eliminating the rebate u
the taxpayer.
Must Have s50.OOO. 900 Ahead.
Mr.. Madden's plan provides that
there shall be no rebate if the sur
plus falls below S5O,00O.O0O. This
would mean that at least $4,000. 900
! would have to be saved in order to
| give the taxpayer anything, and vet
| If business conditions did not war
| rant reduction in any year the
amount of the surplus, even if it was
only s40,00o,e06, would apply toward
the surplus of succeeding year.
| Mr.. Madden estimates that fully
| 100000, 600 will be available as A
surplus next year, so when Congress
! meets in December it can revise the
! taxes downward and permit taxpay-
ers in March, 1925, TO get the benefit
! of a considerable reduction on monev
they are actually earning or invest
ing during the present year.
Copyright 1s"5b