Evening star., 1925-10-19
Taxes Are Coming Down.


mittee squared away today on
course that is expected to result in
legislation considerably reducing the
present Federal tax burden. The peo-
pie generally are more interested in
this pocketbook legislation than in
any other that is to come before the
Congress al its session beginning in
December. There are no great moral
issues over which the country Is
divided. Times are comparatively
good.
The Republicans are in the saddle
in the Senate and House and in the
White House. They will be responsible
for such legislation as is enacted, and
they hope TO go to the country next
Fall with the claim that they are en-
titled to be continued in power be-
cause of economical conduct of the
Government which has made it pos
sible to reduce taxes. The Democrats,
on the other hand. are apparently
planning TO make fight in Congress
for even greater reductions in taxes
than those which the Republican ad-
ministration is willing to advocate.
They will tell the people that if the
Democrats had been IN power the
tax burden would have been reduced
even more.
The Democrats being in the minor
itv in Congress. and without a voice
IN the executive department of the
Government, are in NJ way RESPONSE
HE for the Government. II the ex-
penditures of the Government exceed
the revenues. owing 10 too drastic
cuts in the tax rates, theirs would not
he the blame. The criticism for such a
condition would fall upon the party
in power. 1t behoovcs the administra-
ton. therefore, TO go carefully and to
stay within the limit of safety. Tn
der the leadership of President Cool
idse and Secretary Mellon it is expect
ed that the majority party will cut the
coat of expenditure according TO the
cloth of revenue, so that there may be
no defct.
Secretary Mellon. in a letter ad-
sey, sounds a note Of warning against
too extravagant ideas of tax reduc
ton. He frowns upon a suggestion
that all net incomes up to $1,000 be
exempt from taxation. a proposal that
has been advanced in Democratic and
IN some Republican quarters. Tho
Secretary Of the Treasury points out
that this would result in a loss cf
revenue TO the Government amount
ing 10 S167 900 600. He discounts the
argument that it costs more TO collect
and audit the taxes on the smaller
incomes than the amount of the taxes,
estimating that the cost of collecting
taxes on net incomes of s., 900 and lie rs
is not greater than S., 900 900 year
1t is a mistake. in the opinion OF
Mr.. Mellon, to limit the direct Federal
income tax TO very small group of
the people. The greater the number of
people with a direct interest in the
economic conduct of the Government
the better. Furthermore, the small
taxes now levied on persons with in
d
considerable asset to the Government
when taken collectively. is A small
drain upon the resources Of the tax
payers.
The taxes are coming down is
the burden of the song which Repub-
licans and Democrats alike are sing
ing to the people. Even the defend
ers of the higher surtaxes are Welding
to the demand for tax reduction. The
normal tax is to be sliced and the So
called nuisance taxes will be the sub
iect of attack. One proposal is that
the policy of the Government he
changed so as TO spread the payment
Of the public debt. which is the war
debt, over siXty-two years instead of
twenty-five years. 1t is argued that
the war debts to the United States are
being funded in sixty-two annual
payments by our foreign creditors,
and that the American people should
he allowed similar respite in paying
the governmental debt. While the
suggestion tickles the ear, it has a
procrastinating sound that will not ap-
peal to those Americans who believe
in putting their financial house in
order as quickly as may be without
too great a burden on the people, 50
that the country will be the better
able to meet those emergencies which
may arise in the future.
The ways and means committee Of
the House plans to have a tax.reduc-
ton bill ready when Congress first
meets, and to pass it through that
body before the Christmas holidays.
The country will wish the committee
all success in such a plan.