Evening star., 1926-11-07
Democrats Demand Straight
Cut, Charging Subter-
fuge to Executive.
TREASURY WOULD AVOID
TROUBLE OF REFUNDING
Officials, Backing Coolidge, Sug.
gest Credit on 1927 Payments.
Call Minority Move Unwise.
BY the Associated Press.

BY the Associated Press.
The sudden declaration of President
Coolidge for a refund of 10 or II per
cent of this years income taxes
caused a scratching of heads yester-
DAY both at the Treasury and at the
Capitol.
Surprised Treasury officials dis
creetly suggested that the President s
proposal be accomplished through a
credit on income taxes to be paid
next year. rather than through a
straight-out refund at this time.
Equally surprised Democrats, sus-
pecting that Mr.. Coolidge was trying
to take the political play away from
them, called the Presidents action a
subterfuge to avoid general tax re-
duction until 1928. to give the Repub-
lican party an issue.
Smoot Speaks Cautiously.
Surprised also, but cautious in his
utterances, Senator Reed Smoot of
Utah. chairman Of the finance COM
mittee, whose ears pick up the slight
est mention of taxation or tariff, said
he thought the business outlook
should be studied a bit before any
thing was done.
More outspoken was Senator Sim
mons of Ncrth Carolina, ranking
Democrat on the finance committee,
who described the Executives pro-
posal as a "huniliating surrender
and demanded again that the taxpay-
erS be given a Straight-out reduction
IN taxes rather than the refund.
Generally. in Republican and Demo
cratic circles alike. the move was
taken to mean that the session of Con-
gress to begin December would have
the issue thrust upon it from opposing
camps-the Democrats holding to
their demand for a straight out tax re-
duction and the Presidents followers
counting with the plan for rebates.
Mellon Not Author of Idea.
Secretary Mellon, genius of the ad.
ministration's financial policies. was
not in town when the Official White
House spokesman dropped the words
setting forth the Presidents approval
of the rebate idea. The Secretary has
planned heretofore to apply the $780,
100000 surplus for this fiscal year on
the retirement of the public debt.
Treasury spokesmen explained. how
ever, that the idea was entirely the
Presidents and that the proposal
could be accomplished without embar-
rassment to the Treasury.
1t was emphasized that the Treas
ury would urge that the refund be ac-
complished through the credit plan.
which would spread the benefit over
next years income tax payments.
About 100000 individuals and cor
porations would benefit by the pro.
gram and it was estimated that if i'm
mediate refunds were ordered by Con
gress rather than credit on next years
taxes it would cost much in routine
expenses to return $3.50, 900 to the
taxpayers.
Average Rebate Small. :.
Under the program for a 10 per cent
refund the average taxpayers would
get little more than a dollar. Those
with taxable incomes of less than
$4,000 would get little more than Is
cents each.
About three persons paid taxes
last year and 1t was figured the largest
single taxpayer would get about $500.
600.
lHC SCOOu HTIn yesterday
on its contention that a permanent
tax reduction cannot safely be made
at this time. This was in line with
the position taken Friday by Mr. Cool
idge. 1t was reiterated that while the
surplus would be we'll over the needs
of the Government for this fiscal year
that many of the receipts collected
now would not be available next year
Joseph S. Mccoy. Government actu
ary, said most Of the surplus for this
fiscal year would result from the col.
lection of back taxes on which he said
there had been a special drive. Con
tinued collection Of back taxes cannot
be counted upon, he argued.
Simmons Opposes Plan.
Senator Simmons argued in his
statement that the surplus Of $377,.
100000 at the close of the last fiscal
year also should have been returned
to the public. He insisted proper re.
lief would not be accorded through a
refund, holding that it would permit
partiality.
Only income tax payers would bene
fit from the refund. he said, whereas
the other taxpayers, besides the. indi
vfduals and corporations, are as much
entitled to consideration"
THE President" he continued, "also
leaves out of consideration the deep
seated objection in this country tt
refunds and rebates. This objection
exists for the reasons, first, that the
party entitled to relief rarely gets the
benefit of it through refunds and re
bates: secondly. because of the wrons
doing and partiality always inciden1
to the distribution by this process.
II am gratified. however. and l an
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