Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-24
SUBSTANTIAL TAX
REDUCTION IS SEEN
FOR COMING YEAR
Experts Will Begin Study
Next Week to Determine
How Much Cut Will Be.
COLLECTIONS DURING 1929
EXCEED THOSE OF 1923
Recommendation to Be Made When
Regular Session Meets
in December.
BY the Associated Press.

BY the Associated Press.
A substantial reduction in taxes, IA
vored by President Hoover, will be rec
commended to the regular sessions o.
Congress next December by the Treas
ury, to become effective next March Is
but just what form the reduction will
take has not been determined.
1t was learned today at the Treasury
that the Government financial condi
ton in prospect for the coming yea
is regarded as warranting slash II
taxes, and with this in view. expert!
will start work within a week to de-
tsrmine how much of cut can b;
made and how it will be distributed.
Basis for Reduction.
The financial officials who have
watched the Government revenue this
year, which at the close of business
September 20. exceeded the collections
for the frst two and a half months OF
the last fiscal year by $ll8,936 4S0
pointed to continued prosperity and
large income tax collections as the oase
upon which the tax reduction would
be made.
Since July /. the total Government
income has amounted to S92l,237, ,oOo
while the income tax collections 1or tne
calendar year 1928 have totaled, up to
September 20, approximately $780,
oo0. 900, an increase over the same period
of the previous year of approximately
S27l 900 900. In addition. the Treasury
expects to collect approximately SoOu,
o0O. 600 income tax when the December
payments are made.
With continued business prosperity
experts feel that income taxes Will
keep on mounting and equal, II not pass,
those of the last year. It has been the
experience of the Government that each
time taxes have been reduced, coDec-
tions have been substantially increased
through withdrawal of funds from tax
exempt securities and their investment
in other lines. e--'
Cut 10 Be Large.
While not predicting that the pro-
spective tax cut to be proposed in De-
cember would be of the 100000, ,00O
variety, officials said 1t would be large,
ss present indications are that the Gov
eminent will end the fiscal year June
80 with a surplus Of more than $500, :
100000, as compared with $l84, ,00e, 900
last year.
The income payments, which changed
q predicted Government deficit into a
surplus last year, are counted on TO
continue high when the returns for
this calendar year are received next
March. Last March the income tax
receipts amounted to S601 1858 ,804. Tne
June payments totaled S555, 5,256, SOB and
the September payments up to SeptSni-
ap0YoOafpd
with 10 days yet to be reported.
Treasury officials in proposing tax
reductions for many years figured that
the Government must have margin
of at least 100000, 900 between income
and expenditures. This opinion has
been changed in recent years, however:
and officials have expressed the belief
that smaller margin was safe.
Doubt Serious Effect.
The tax reduction proposal will be
Influenced to some extent by appro-
priations to be made by Congress, but
officials deem it unlikely that these ap-
preparations will have serious effect.
A reduction in the tax on earned
incomes is regarded as likely to be one
Of the principal proposals OF the pro-
gram. The Treasury has not yet COM
mitted itself upon that phase, but Sec
retary Mellon in the past has said he
was in sympathy with lowered rates
on earned income.
The extent of the proposed tax re-
duction cannot be definitely determined
by the Treasury until experts have
studied the corporation returns for the
third quarter of 1928, which will be
received in october. Only after these
returns are in can fair prediction be
made Of tax receipts next year on the
assumption that the present business
prosperity will continue.
Tax reductions since 1921 have al
ready cut approximately 81 1,S26,000, 600
of She tax bill of the Nation. These
reductions we're made in the revenue
act of 1921, $663, 900; 1924, $519,-
900 900: 1926, 442,000,0 900; 1928, $222,-