Evening star., 1925-02-23
FURTHER TAX CUT
BELIEVED ASSURED
Increasing Surplus Makes
Reduction This Year Pos
sibIe, But Delay Favored.
BY DAVID LAWRENCE.

Chairman Green of the House ways
and means committee has let the cat
out of the bag. He has revealed the
fact that a considerable surplus over
expenditures will be available this
year and that another downward re-
vision in taxes is possible.
The administration did not intend
to have that disclosed now. For If
what Representative Green says is ac-
curate, then an extra session of Con-
gress could still be called and the
taxpayer given the benefit in his June.
September and December payments of
reduction on 1924 taxes payable this
year.
Mr.. Green points out tha. the 25 per
cent horizontal reduction really dimin-
ished revenues only about 500, 900, 900.
This Is far below the estimated loss in
revenue. because receipts were larger.
Now it develops that the s6S .000,0 sur
plus which the President indicated in
his budget message would be available
will be increased so that about $780,
100000 could really be refunded to the
taxpayer, thus granting another 25 per
cent reduction. If this is the situation
in February 1T may well be asked what
will be the situation on March so or
Whereabouts. when the first payments
on 1924 taxes will have been made and
some estimate can be obtained on the
true size of the surplus.
The Treasury Department has
taken the position that no extra ses-
sion was neces ssary because it would
take until December to make up a
new tax plan. Also 1t was said that
the $6S,000,000 surplus afforded too
narrow a margin on which to base
a reduction this year. Every day
evidence accumulates that the Treas
ury's figures have as usual been too
conservative. Chairman Green thinks
so.
But Mr.. Green disclosed another
and perhaps more controlling reason
for the postponement of tax revision.
He says the next tax cut will be in
the higher surtax rates. The Treas
ury has been striving to accomplish
that right along. It's theory has been
that the small taxpayer got his in
the last revenue act and that the
large taxpayer now should have a cut
in order that business may be given
further stimulus and revenue receipts
increased to such an extent as to
permit in future years another cut
for the small taxpayer. Secretary
Mellon has insisted from the outset
that the proper way to reduce the
more rich men pay taxes, and the
way to do that was to encourage the
use OF capital in taxable enterprises
instead of tax-free investments.
If Congress can be prevailed upon
to cut the high surtax, Mr.. Mellon
will retire from office ultimately
with a feeling that he has accom-
plished the greatest step in tax re-
form. The Republicans have a
working majority in both houses, and
they could do as much in an extra
session as in the December session,
which probably would not get into
action and pass another revenue act
before March, 1926. The Treasury
also thinks that by March 25
larger surplus will have accumulated
than is now available, and that per-
haps a greater tax cut will be pos
sible. This precludes the thought of
cut on taxes payable next month.
In other words, the Treasury is
against a small-sized cut on 1924
taxes payable now and in favor of a
large-sized cut in the incomes earned
this year and payable March, 1925. 1t
is important, however, that tax revi
sion looks like a certainty for pay
ments made in 1925, something that
will, to a large extent, affect the
course of business transactions. and
during the present year.
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