Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-17
DEFICIT OF BILLION
|. ON BUDGET LOOMS
Mellon, on Return, viii Face
Dilemma in Revenues,
Sagging Further.
BY the Associated Press.

BY the Associated Press.
A Federal Government financial
dilemma Of growing proportions awaits
the homecoming of Secretary Mellon.
The Treasury chief will find a lop-
sided budget sagging under last years
1908 900 900 deficit and facing another
in the billion dollar class for the 1882
fiscal year.
Between his arrival from Europe this
week and December, Mellon must pre-
pare for inclusion in President Hoover'S
opening message to the new Congress
recommendations for meeting the basic
problem of balancing Government ex-
penditures with receipts.
Before he sailed in June on the vaca-
ton and business trip that included
London and Paris conferences on inter
Governmental debt matters, Mellon said
the Treasury was aware ''of the defects
in our tax structure"
During his absence, department ex-
perts have scrutinized Federal finances
seeking a solution. President Hoover
has directed reduction in expenditures
but opening weeks of the new fiscal
period show OUTLAWS exceeding revenues.
The Secretary's warning that 'the
tax system must come under careful
scrutiny" has received new impetus
from the Internal Revenue Bureaus
analysis of the $61 ,o0o, 900 drop in col
lections below 1880.
Excise Taxes Proposed.
Every major division of internal Rev.
enue showed decline. Reduced income
tax collections contributed $3.50, 900 900
to the total slump. Individual income
/ taxes accounted for 1913 1000 900 of this
aggregate.
Noting that 5000 persons pay 81
per cent OF the individual income tax
collections, Secretary Mellon has stressed
the danger of depending for SO large
a part OF our revenues on compare
lively small number of taxpayers"
Mellon and Undersecretary Mills have
suggested the Government needs more
stable revenue producer than income
taxes. so subject to fiuctuation. A sys-
TEN based on excise taxes has been
| proposed.
President Hoover has indicated the
need for a general revenue overhauling
but has not signified this viii be recon-
mended to the next Congress. Admin
| istration spokesman and some leading
Democrats at the Capitol have opposed
| any tax legislation during the economic
| depression or just before the 1882 preSi~
Dental election.
Internal Revenue Bureau figures
| showed that tobacco taxes, though par
| ticipating in the general decline. con-
| tinued TO Weld large revenues as the
second most important source Of Gov
| eminent funds In the past fiscal year
they dropped only 100000 TO $444,-
| 600 600
Income tax collections furnished ST.
! $50 600 dropping from s2,410.259 ,230
| collected In 1880 Estate taxes dropped
81 900 900 to s4s. 900 900, Theater ad-
| missions taxes and club dues supplied
! Treasury Golfers with $4,000 900 after
dropping of 50 400, 600 Documentary
/ stamp and miscellaneous taxes Slumped
/ TO $61 ,955 444 a decline of $50 458 05S.
/ Total internal revenue collections were
/ 81. 42e, 900 600 for the fiscal period. as
compared with 5000 100000 the pre-
I ceding year,
! Deficit and Public Debt Rise.
| The Government is meeting current
expenses through large financial oper-
atoms centering on short-ternl borrow
/ ing With a month and a half Of the
| new fiscal year gone, the Treasury
\ deficit stands al s2s5 ,0o0. 600, as COM
pared with 5000 0o0.0 900 year ago
| Before the calendar year end IL is
/ expected the Governments unfeyorable
| financial condition will compel the
/ Treasury to issue additional long term
bonds, In june, the public debt was
! increased more than $500 900 900
! through bond issue maturing in 1913.