Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-15
Continuance Of | Per Cent
Income Tax Reduction Is
Thought Impossible.
SHORTAGE NOT ENOUGH
TO CAUSE ANY ALARM
Senator Smoot Says Increase in
Assessments Is Necessary to "Bal-
ance Books" in Depression.

President Hoover believes there vii
be small Treasury deficit at the enc
of the fiscal year, June 80. situation
which fiscal authorities of the Govern
ment look upon as making impossible
the continuance in 1881 of the pei
cent tax reduction now in effect or
1929 incomes.
The President has given prompt as
surance that the deficit would not bt
Of suficient Importance to cause alarm
It is the result of the failure Of national
income to keep pace with necessary
current expenditures.
Deficit Denied Last August.
Gas we have had surpluses over many
years" he said late yesterday, I'VE proba-
bly, can stand small deficit over one
year without disturbing the stability Of
our Government at ALL"
Mr.. Hoover did not refer specifically
to the per cent tax reduction, conf
menting only in reply to questions as
to whether there would be a deficit
He said the executive department had
deferred giving final consideration to
the estimates to be sent to Congress
until the last possible moment because
the maximum experience with In
comes" was desired.
The advisabfiity Of continuing the
per cent tax reduction has been under
careful consideration since last Sum-
mer. Last August, Mr.. Hoover. after
reviewing the fiscal situation with Sec
rotary Mellon and Undersecretary Mills
of the Treasury, said:
at can state that there Is no ground
now for the prediction in the press this
morning that deficit was impending
which would prevent the continuance
Of the tax reduction established last
year."
Smoot Opposes Tax Reduction.
Just prior to the Presidents an
nouncenaent, Senator Smoot Of Utah
chairman Of the Senate Finance Com
mittee, said he would oppose continu-
ance Of the reduction.
Senator Smoot: who speaks Wltn
authority on fiscal affairs. asserted.
awe cannot have continuation Of
the emergency tax reduction without
having q deficit. The American peo-
pie viii not stand for the Government
raising additional money to meet its
expenses while we continue the lower
tax rates. ! am opposed to continual
ton Of the lower schedules in view OF
conditions"
'sWe are going to pay our debts nc
matter who howls, and restoration OF
the / per cent Is imperative" Senator
Smoot said. with approximately
$500 ,000. 900 in appropriations outstand-
ing, and more likely to be made. ]
don't see how next year we are going
to pay any more into the war debt sink
ing fund than the 3la per cent required
by law. Approximately 10000, 00O, 600
has been paid into that fund since II
was established"
The former practice Of diverting a
percentage Of tie foreign debt. payment
to the payment of the war debt viii
have to be discontinued next year, the
Senator observed, in order to balance
the books" Such payments will be con-
fined to the sinking fund, as required
by law.
Use for Surplus Necessary.
"The economic depression" Senator
Smoot added, lis worldwide and not
restricted to the United States. In my
opinion it Is the result of conditions
arising out of the World War caused
by overproduction all over the world
There has been overproduction of sugar
wheat, cattle, automobiles, tractors, cop
per and lead. Present conditions are
not like former panics, under which
foreign nations thrived. The conditions
exist all over the world"
AS a remedy for the condition, Sen.
ator Smoot said, I'VE will have to regu.
late our affairs to produce what w
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