Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-03-14
STEADY CUT in u. s. TAXES
FORESEEN BY MELLON
Though Expenses Grow, Continued
Economy Will Solve Problem-Local
Leyies Alarm Officials.

pushing its levies downhill.
AS contrasted with the SO, Jos, 000, 900
appropriated by Congress for the
present fiscal year. exclusive of the
Post Office Department and postal
service. experts point to the round
sum of 81 500, 900 900 year levied by
the local governments on the Amer.
lean people, with this figure jump
ing upward at an estimated rate OF
about $500. 100000 a year.
Tax Cut Not Hindering.
The tax cut provided in the new
revenue bill while generous in lift
ing more than 100000 Americans
out of the taXpaying classes and re-
ducing the amount due from prac-
tically all others. did not dig SO
deeply into Uncle Sans revenues
that he will be unable to go ahead
with the orderly business of retiring
the public debt. under the plan OF
the sinking fund. He will be able
thus to wear away at this mountain
of indebtedness, gradually reducing
1t while looking to the happy day
when 1t may disappear altogether.
Two principal instruments are
being used by Uncle Sam in wearing
Town this mountain OF a $40, 000, 900 900
public debt-the sinking fund and
rcpayments from foreign powers.
under their debt funding agreements.
although other items during some
years are thrown into the scale to
bring down the total, such as sur
plus at the end of a fiscal year.
Interest and sinking fund payments
during the fiscal year ended June 80.
1925. for which provision was made
in the budget. amounted to $l.1SS.-
600 900, of which 1882. 100000 went for
hn ciy alY
ing fund.
What We May Expect.
At the present rate of payment. as
provided by the sinking fund, the So
called domestic debt, representing
money spent by America in the war,
and amounting at the present time to
$S.712. 100000, will have been dis
charged by 1914.
During the past fiscal year the total
gross debt was reduced by $734.619.101.
and at the end OF the year stood at
$20.516. 193,S88. Such reduction in the
public debt in that one year alone has
resulted in a saving Of interest of
about $30,00O,000 annually to the
American people.
The policy now used by the admin
istration. it is pointed out by Secre-
tary Mellon has been in force "since
the beginning of the Government"
and has consisted I'm balancing the
budget or keeping expenditures within
receipts. and prompt extinguishment
of the public debt
SIT has not always been easy to dis
charge the debts which this Govern
ment has been obliged to contract"
said Secretary Mellon, but deter
mined efforts have been made, even
under circumstances when debt pay.
ment was a far greater burden than
at present: and those efforts have been
Budgets Are Balanced.
THE Government has followed the
sound policy Of balancing it's budget
from year to year." he continued. "or-
binary receipts against ordinary ex-
and including as ordinary
expenditures for budget purposes the
sinking fund and other debt retire.
ments properly chargeable against or.
binary receipts. This means that pro.
vision must be made for expenditures
on account Of interest and retirement
of the war debt before the budget can
balance. and a balanced budget each
year indicates reasonable amount of
debt retirement out of current reve-
nues."
The prospect of lower Federal taxes
in the far future depends also heavily
upon the ability Of foreign powers to
repay the United States under the
program Of amortization which has
been agreed to already by II Of them.
While the total debts acknowledged
as Of today by all debtors to the
United States amount to about
$11 200, 100000 they will pay much
more than that when current inter-
est is added. For instance, the II
powers, headed by Great Britain,
who have signed debt agreements,
will. according to latest fluctuations
at the Treasury, pay into Uncle
Sans till by the end Of their 62-year
period. a total Of $4,000 900. 900. al.
though their principal Indebtedness
as Of today stands at $7.434 100000.
Great Britain would pay more than
1900, 100000 and Italy. If the SEN
ate approves the agreement, would
pay more than $1,000, 100000. France,
with her debt of more than $4,000
100000. has not as yet funded. and
hence. is not included in this total.
Secretary Mellon Gratified.
Secretary Mellon. standing with
bag. the greatest in the world. thus
today feels gratifled by progress
which has been made in the great
business Of lifting the burdens of
taxation from the American people.
The new tax bill. embodying prin-
ciples of tax reform in the direction
of not only relieving the levies on
the smaller taxpayer but of lower
ing the high surtaxes and inherit
ance taxes. thus releasing more
money for productive enterprise, Sec
rotary Mellon feels confident will
increase the already sound pros
perity of the country and. conse-
quently bring additional dollars ring
ing into Uncle Sans till.
For the next few years the re-
ceipts over expenditures will leave
q fair surplus. according to present
prediction. with prospect, however,
in the far future, of a progressive
reduction downward still further in
the Federal tax burden Of the Amer
loan people.