Evening star., 1926-09-22
TAXDATAREWVE
REDUCTION ISSUE
Administration Problem oil
Further Delay Complicated
by Showing.
BY DAVID LAWRENCE.

The more the returns from the Sep
tember collections of income tax are
studied the more complicated be
comes the problem Of the administra
ton in waSding off the movement for
further tax reduction to be launched
by the Democrats at the December
session of Congress.
! The administration has taken the
position that the facts available jus
tify no predictions as to when the
tax cut can be made. The minority
insists that this Is simply a means
of postponing the tax reduction until
the next presidential campaign year
1928.
But the September collections dc
verify the statements Of the experts
that what has been lost through the
reduction of miscellaneous and in
direct taxes would be more than offse'
by the increase in the amounts paid or
individual and business returns. Thi.
amounts to $69, 9,153,000 which. with
Sc, ,433, 900 additional from tariff
receipts, makes a total Of $78, ,586 900
which is for purposes of approxlma
ton about the same as the $S1 100000
loss in miscellaneous receipts.
Prospect of Increase.
Most of the receipts from taxation
however are on incomes earned dur
ing 1925. Business conditions during
1926 admittedly have been better thar
last year so the Treasury may eXpec
greater productivity from the new ta1
rates than might otherwise have beer
| the case. But while the experts ma!
prophesy this, the definite data can
| not possibly be available before thu
| payments made on March l5, l927
| are studied and this will be abou
| April or May Of next year. Congress
on the other hand, unless called int
extra session, would adjourn on Marcf
4. 1927, by law, and would not have
! to meet again until the session of De
| cemher. 1927, which would run int
| The Spring of 1928.
The administration also intends t
iterate and reiterate that 1t is unsaf'
| to reduce taxes on an expectation ant
that nobody can foresee business con
ditions in 1928 and 1929 and that too
low a cut might be dangerous.
To this the minority will answer
that in the early part Of 1928 it will
be Just as difficult to. see into thu
future and determine the curve o
! business as it is today and that nj
tax bill has been passed on the as
sumption that business conditions
would be good or bad, but on the basis
of the average productivity OF rates
In other words, the Treasury's owr
argument that the lower the tax rate!
the higher the return, which was first
opposed by many Democrats, now viii
be used by them as a reason for a Gu
ho nacnn,hor SoCoi0n of Congress-
this year.
Necessity of Waiting.
This will cause the administrator
to emphasize the necessity of waiting
/ till the March returns are eXamine'
and then the pressure for an extr;
session or the retroactive application
of the new cut In taxes will begin.
If it were not for the public deb
policy which has been followed in tn
past by the administration. ther
would be an argument raised to tn
effect that if the receipts for any on
year fall below expectations. the pay
ments on the public debt for that yea
| can be correspondingly reduced, thu
affording a cushion against the uneS
| pected.
! Just what the minority will be abb
| to Go in the next session 1t is q littl
early to forecast, but evidence is &C
! cumulating that the Democrats vii
! be demanding a cut in taxes and tina
! insurgent Republicans will be aiding
! them so that ii is not at all certain
! at this date that the administrator
will be able to withstand the pressur
| especially since detailed reports OF
! the December receipts also will hav
been available and there are some eS
! perts who believe December will show
some increase over September in In
direct tax collections.
tCopyrixht. I926.l