Evening star., 1926-11-06
PRESIDENTS PLAN
|FOR TAXES REBATE
10. K.'DAT TREASURY
Officials Propose, However,
Credit Be Given in March,
Not Cash in December.
MELLON DID NOT INSPIRE
WHITE HOUSE ACTION
Lack of Time for Making Refund
This Year and Expense of
Doing It Emphasized.
BY the Associated Press.

BY the Associated Press.
A White House plan for 10 l<A
cent tax refund was described at the
Treasury today as President Cool
idge's own idea. uninspired by Sec
tary Mellon, but regarded by Tn"
Treasury officials as unlikely to cause
serious embarrassment to the Gov
ernment's fiscal policies.
At the same time it developed that
II accepted by Congress the Presi-
dents proposal probably would take
the form of an early Spring bouquet
to the taxpayer, not a Christmas pres
ent. The Treasury thinks 1t would
be much easier and just as salts
factory to apply the deduction as q
credit on the March 10 payments of
1927, and not attempt the bookkeep-
ing that would be necessary to make
actual refunds during the present cal
endar year.
Surprise to OficialdOm.
Mr.. Coolidge's proposal. announced
Iate yesterday by the White House
spokesman, came to most of official
Washington out of q cloudlesS sky.
Secretary Mellon has said repeatedly
that 1t was too early to talk about
tax reduction, despite the S250,OOO, 900
Treasury surplus which seems to be
in the off1ng. That attitude the Sec
retary maintained stubbornly under
concerted Democratic attack during
the congressional campaign.
High Treasury officials said today
that Mr.. Mellon had not changed his
mind, and pointed out that what MIR
Coolidge advocates is not a tax reduc-
ton, making permanent revision of
the revenue schedules, but merely a
charging off Of the present surplus
to the credit of the taxpayer.
Because of this temporary aspect
of the plan, the Treasury thinks II
can be carried out without serious
embarrassment. 1t does favor a post
pOnement until March. however, for
reasons of it's own. The cut. even II
delayed, would apply Just the same to
this years tax bill, but instead of
meaning actual repayments TO tau
payers, it would stand on the books
for three months as Il credit.
Lack Of Time Cited.
Congress does not meet until De
cemher 6, and the last payments for
this year are due December 10. On
the theory that congressional action
would not be probable by that date.
we'll regard the total levies of the
present year as already in the vaults.
To hand part OF the money back
would require a lot OF check writing
and involve an appreciable expense
But to merely enter the credits on the
books, and let them be absorbed when
March Is inStallmentS are due would
be simple matter.
While some Democratic leaders to-
day were describing the Presidents
proposal as q political subtel'fuge, de
signed to give him q campaign issue
for 1928, the Republican managers in
Congress apparently were getting
ready to fall into line behind the
White House.
SnOOt Generally Favorable.
Chairman Smoot of the Senate
finance committee. which would have
charge of the question at that end
of the Capitol. said he would favor
the plan II he found present business
prosperity would continue during the
remainder OF the fiscal year. lie had
every confidence. he said, but thought
the business outlook should be studied
before there was any definite move.
Last year. the Senator said, tax re-
ceiptS from the last six months of
the fiscal year were 500. 900 900 less
than the first six months, ard under
such conditions a tax refund probably
would not have been justified.
Senator Swanson, Democrat, Nir-
ginia, pronounced the Presidents pro
posal a mere subterfuge to avoid Il
general tax reduction until 1928 to
afford campaign issue for the Repub-
lican presidential candidate"
1.-THE Democrats" he added "are
willing to cooperate with the Repub-
licans for an adequate reduction OF
all taxes, which should be reduced TO
the amount Of the surplus. with only
sufficient fund kept in the Treasury for
reasonable business needs"
10 to 12 Per Cent Cut.
The Presidents plan calls for an
immediate refund Of 10 or II
per cent on individual and corporation
taxes paid this year on last years
incomes.
1t was said at the White House that
studies made by the President In the
last few days indicated the surplus for
this year would amount to at least
$3.50, 900 900, and on that basis Mr..
Coolidge believed the refund war
ranted.
It Is the plan of the Executive that
refunds should be given on this years
taxes, the last installment of which
Is due December Is. but that the pres
ent rates should apply on next years
taxes and until Congress is able to de-
termine whether permanent reduc-
ton Is possible.