Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-25
Senator Thinks U. S. Should
Follow Britain's Example
and "Face Music"
OPPOSES REDUCTION
IN PAY OF LEGISLATORS
Treasury Experts Canvass Revenue
Sources-Program Due Within
Month or Six Weeks.
BY the Associated Press.

BY the Associated Press.
Senator Reed of Pennsylvania, after
readvocating to President Hoover today
his proposal for a sales tax, said he
believed the United States should follow
Great Britain's example and face the
music"
Reed said he believed that unless
additional moneys were raised by tax
alton the Treasurys deficit would reach
beyond $l.5Oo,00o,O 900.
The Republican Senator called upon
the President principally to congratu-
late him upon his address to the
American Legion, which, Reed said,
apparently has killed the bonus move"
Discusses Bonus.
eff the Legion does not bring up the
bonus" he said, II don't believe 1t will
ever pass Congress"
Reed said he was opposed to such
methods of raising funds as decreasing
the salaries Of congressman and Federal
workers.
ITO cut the pay of Senators and Rep
resentatives would make it a rich man s
job" he asserted. 1T would eliminate
the poor man from public office"
The Pennsylvania said If the pro-
posed sales tex of one-half of per cent
was imposed it would mean man with
a salary of $4,000 would pay only $40 a
year ii he spent the entire sum on
taxable articles.
Surely" he said. people must pay
something toward the conduct of Gov
eminent"
After leaving the White House Sena-
tor Reed went to the Treasury, where
he talked with Secretary Mellon for
nearly an hour. The Senator said he
had talked taxes with Secretary Mellon
only incidentally and had called to dis
cuss banking conditions in Pittsburgh.
He said the Pittsburgh banks were
now In good condition and there was
nothing to fear from the situation
there.
Reed said he favored repeal of the
capital gains and loss tax, which per-
nlits deductions from income on losses
from stock transactions. He said that
the tax had permitted large deductions
from income of 1880 and was one of
the causes for the large drop in the in
come tax collections.
There have been widely varying opin-
ions of what action the Government
should take to meet its growing deficit.
While Reed has proposed a sales tax,
several other Senators have suggested
raising the taxes on large incomes.
Mellon Favors Change.
Senators Watson of Indiana, the Re-
publican leader. and Harrison of Mis-
sissippi, the ranking Democrat on the
Finance Committee. and Representative
Tilson of Connecticut have opposed any
tax revision at the next session.
Secretary Mellon and Undersecretary
Mills have called the income tax too
unstable to form a dependable base
for the Governments tax system and
suggested that some form of excise tax
should be substituted.
Treasury experts are canvassing all
possible sources of revenue What
recommendations will be made to Con-
gress will be decided within a month
or six weeks.
While Treasury officials have declined
to comment, fiscal experts have said
the Government had reached a stage
where more income was imperative. It
concluded the last fiscal year with a
deficit of S903, 900, 900, and at the close
of business September % had a new
deficit for less than three months of
S369, 1861, TOT.