Evening star., 1927-08-11
EXCESSIVE TEXCUT
WILL Be OPPOSED
Mills Reveals Arguments Ad-
ministration Will Use at
Next Session.

Arguments which will be used by
administration leaders against what
they consider excessive demands for
Federal tax reduction were set forth
indirectly in an address delivered
Wednesday night at Charlottesville by
Ogden L. Mills. Undersecretary of the
Treasury. Indicati tions accumulate
that revenue revision in the next Con-
gress is shaping up for a major con-
troversy.
Unless Congress is called into extra
session, the ways and means commit
| tee will not meet until the latter part
| Of October to begin its studies and
hearings in connection with changes
in the revenue act. In the mean
| while, however. experts appointed by
the joint congressional committee on
internal revenue taxation are gather
ing statistics and opinions bearing par
ticularly on administrative features or
the law.
Clash OF Views Seen.
The clash of legislative views Will
come between those who believe that
the large surplus shown by the Treas
June 80 may be expected to continue
in the main, contending that this
should be translated into reductions
in the tax burden, and those who
point out that some Of the sources of
revenue received in that period are
disappearing rapidly and that tax
cut should be of moderate proportions,
the surplus, If any, to be used for
debt reduction.
This latter school of thought pre-
ferS to term the expected tax bill
next Winter a revenue-revision meas
ure rather than a tax-reduction bill.
Speaking before the Institute of
Public Affairs at the University of
Virginia, Mr.. Mills emphasized the
growing burden of State and local
taxation in the face Of reduction in
Federal taxes, quoting figures to il.
lustrate the point.
Would Limit Aid.
But the Undersecretary made zone
important reservation" to the pros
poets for continuation Of a satisfactory
condition in Federal taxation, this
being the p"oviso that Federal aid
for States be- withheld from new fields
of activity. Averaging $75.0O0,O 900
annually for roads, Uncle Sam is
spending .tltogether around $110.000,-
900 a ye:;- now for aid to States in
various projects.
1t was in his paragraphs on debt
reduction and refinancing to obtain
lower rates Of interest that the Under
secretary sounded the arguments
which are to be used in the fight to
keep tax reduction next Winter
within what the administration con-
siders reasonable bounds, although Mr..
Mills made no direct allusion to the
fact he was sounding such arguments.
In the last six fiscal years, he pointed
duced $5.S46 900, 900, saving in interest
s200,00O,OO0 year, while refnancing
operations already have cut the in
terest on the balance of the debt by
$50 100000 a year--these operations
to be extended this Fall.
Interest Payments Cut.
In the forthcoming conflict over the
new revenue bill. It may be expected
that strong stress will be laid on fig
ures such as these. showing that the
000, ,000s a year through reductfon. In
interest payments. This was accom-.
plished not only through sinking fund
operations, but by application Of the
surplus to debt retirement automati-
cally. Debt reduction. it will be en-
phasized, is really tax reduction. for
otherwise the tax burden would have
to be maintained higher. ,
Speaking before the business or
ganiZation Of the Government on the
eve of his departure for the Black
Hills, President Coolidge pointed out
that Of the Treasury surplus. in the
then closing fiscal year. $315, ,00O, 900
was made up Of capital stock tax, back
income taxes, railroad receipts and
other items which are constantly de-
creasing and shortly will disappear.
There is some uneasiness on the
part Of those advocating a heavy tax
cut next Winter over the prospects of
unusually large expenditures by Con-
gress. Flood control and relief, farm
legislation, the anticipated demands Of
the larger Navy men, all are being
viewed with degree of apprehension
as to the effects of sizably increased
appropriations on the possibilities Of
lowering taxes. -''
(Copyright 1927