Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-04-06
u. S. FISCAL PLAN
AIDS TAX SITUATION
1929 Depression Offset by
System of Working Nearly
\\Year Ahead of Time. 3
BIZ DAVID LAWRENCE.

Although President HOover's latest
summary on Federal finance makes no
mention of 1t, the luckieSt break that
the Government experienced in con-
nection with tax receipts is that the
fiscal year on which Uncle Sam keeps
his books doesn't coincide with the
| calendar year by which the American
taxpayer makes cut his returns and
pays his bill to the Treasury.
Two things might have upset calcula-
tions and brought about deficit-the
business depression of last Autumn and
the revision downward of the tax rates
last year, bringing a smaller income to
the Government. Fortunately the tax
receipts that started coming in on
March IS last are based on incomes
during the calendar year 1929, and
three-quarters of that year saw high
records in American business. If the
first half of 1880 isn't productive of
high incomes, the Treasury will not be
disturbed, because the last half of 1880
may see better business conditions, and
then in March, 1881, the Treasury may
again find itself with relatively high
income tax receipts.
Under the fiscal system in vogue for
generations, however, the Government
works nearly year ahead of time. Thus.
the money now being collected from the
taxpayer Will NC dpPIISA VA ShpCAlSCot
beginning July l next and running
until June 80, 1881. The income from
taxation, therefore, will be about what
was expected and the Autumn depres-
sion of 1929 will have had no effect
on the situation. The gueSSes made by
the Treasury experts as to what sources
of revenue would show an increase and
what would show decrease under the
new schedules. which went into effect
with the payments on March Is last
have proved accurate.
Now, however, Congress is being
asked to economic, because there is no
telling what money will be available
when income tax payments come to the
Treasury beginning March Is, 1881.
That's the crucial test, because the
Government has based its expenditures
on the idea that income Tor the fiscal
year, beginning IN July of this year
and collected beginning in March, 1881,
will be about the same as previous,
years. If the calendar year 1890 proves;
better in it's third and fourth quarters
than in its first two, the Government
will come out with a slight surplus.
On the other hand, the lower tax rates
are expected to bring into the Govern
ment funds that now are withheld, due
to evasion or avoidance. Generally
speaking, the lower the tax rates the
more productive are the returns.
President HooVef'S call for economy
will be emphasized more and more dur
ing the present session, for nobody will
be able to know what business condi-
tions will do to tax returns. The
Treasury experts can forecast what will
happen under normal conditions of
business in each income tax group, but
they can't prophesy' what economic
changes will do to the returns. If the
Government and the taxpayer had both
kept books on the calendar year basis
there would have been even more I'M
certainty, and perhaps real concern.
AS it is, the rest of 1880 is yet to come.
and there's time to figure out how
much can be spent in the fiscal year
beginning July. 1881.
(Copyright, 1902