Evening star., 1930-12-07
LEADERS HIT BORAH
TAX INCREASE PLAN
Senate and House Committee
Heads Say There Will Be
No Additional Levy.
Continued From First Pase.)


I would prefer to follow the surees
ton OF the President and the very abb,
Secretary Of the Treasury, Mr.. Mellon
whose opinions would be based on tn,
very careful investigation and best es.
Inmates made by experts Of the Treas.
ury as well as their own very wise con-
clusions rather than the pronounce.
ment of Senator Borah with Whose
opinions I am naturally not aIways ir
agreement. Until Congress is DEFINITELY
advised by the officials of the Govern.
ment responsible for its financial sta.
bil1ty have no comments to make
either as to the announcement Of Sen.
ator Borah or the possible change OF
rates of taxation. It may not be aniss
to mention the fact that Senator Borat
is not even a member of the Senate
Finance Committee and therefore hi:
conclusions are probably both immature
and not founded on full information
which undoubtedly will later be avail.
able to Congress. It can also be def
nitely stated that taxation measure.
originate under the Constitution in the
House and are first considered by the
Ways and Means Committee of the
House so that an announcement as tc
what may or may not be done in the
way of taxation matters from even as
brilliant Senator as Mr.. Borah can
not be regarded as authoritative in any
manner.
"I have no suggestion to offer in re-
gard to how any possible or probable
deficit may be met until we are further
advised because we do not know at the
present time what the expenditures will
be or how serious deficit there may be
Could Raise Money.
'If there Is likelihood Of temporary
deficit in view Of the very low interest
rates In the market at the present time
the Government can easily get whatever
money 1t may require without any very
great COST It seems to me that 1t would
be very poor business for the Govern
ment to increase taxes and seriously
hamper business following depression
when a temporary loan could be easily
financed"
Admittedly any move to increase
Federal taxes must originate in the
House under the Constitution. How
ever, II the House sends to the Sem
ate any kind of tax legislation at the
present session 1t would be subject to
amendment. With the door open, Sen
ator Borah would be in position to
offer an amendment increasing the
Administration leaders have frankly
announced that 1t will be impossible to
continue the reduction of l per cent
in the normal tax rate on incomes Of
individuals and corporations, which
was made effective a year ago on the
incomes received in the calendar year
1929. But so far they have not indi-
Gated that an effort will be made to
increase the tax rates over and above
the rates paid on 1928 incomes. The
law reducing the rates on 1929 incomes
was framed as a temporary change In
the law for one year only. It dies
unless there should be affirmative
action by Congress continuing it. That
Is obviously impossible.
Support ProbIematical.
How much support Senator Borah's
proposal to increase the Federal income
tax rates will receive from his coll
leagues Is problematical. The progress
sive group in the Senate to which
Senator Borah belongs were opposed
several years ago to the cuts in the
income tax rates then urged by Sec
retary Of the Treasury Andrew w.
Mellon and supported by former Presi-
dent Coolidge, particularly the reduc-
ton of the surtax rates. Senator
Borah was one Of those who declared
that the war debt with its huge in
terest charges should be wiped out as
speedily as possible and his contention
was that those best able to bear the
burden of this debt-those receiving
the large incomeS-should be made to
pay it In large part.
The progressive group in the Senate
holds the balance Of power today. II
the Democrats should line up behind
Senator Walsh of Massachusetts, in his
demand for an increase in taxes and
the Republican progresSives should
combine with them the coalition would
control In the Senate.
However, this legislation must origi-
nate in the House, where the Republican
majority still numbers about 100 in the
present Congress. The House Repub-
licans have in the past strongly backed
the President and Secretary Mellon in
their recommendations regarding flnan-
cial matters.
Watson Sees Hoover.
While Senator Borah was declaring
for an increase In Federal taxation,
Senator Watson Of Indiana, the Repub-
lican leader, was in conference with the
President at the White House. It Is
understood that Senator Watson was
urged by the President to do his utmost
to keep the appropriations made by
Congress within the budget figures. The
administration admittedly Is strongly
concerned with the situation and is
anxious to keep the Congress from
swelling the expected deficit by large
appropriations.
The House Appropriations Committee,
considering the bill to provide $3.50, ,000,-
600 for Government construction, late
today decided to lop SAC, 100000 OF the
measure, making the sum $l10,000,000.
The House committee earlier in the
day added $5,0O0,000 to the $25, ,000, 900
proposed by the administration for relief
of the drought-stricken farmers. The
Senate Committee on Agriculture boosted
the sum for drought relief to $50 900 600.
as proposed by Senator Robinson of
Arkansas, the Democratic leader.
Representative ASwen of Louisiana,
Democratic member of the committee
on agriculture, declared his intention
of seeking In the House to increase the
drought relief fund to 10000, 900, and
predicted he would be successful.
Special Session Seen.
The conflict over taxes and appro-
pr4atlonS between the administration
forces and the opposition, gave rise last
night to further predictions that in the
end q special session of the Congress
was inevitable next Spring.
Those who support such a session in
SiSt that If none is held, there will be
no chance for real legislation, some of
1t much needed, especially that dealing
with water power, railroads and motor
buses until after the national election
in 1882. They argue that the first reg
ular session of the new Congress does
not meet until December, 1881, and
that with the national campaign In the
ofnng, little outside of appropriation
bills will be put through at that ses-
sion. The progressive Republicans are