Evening star., 1931-12-10
The Administrators Tax Plan.

A specific plan for an approximate
balancing Of the Federal budget has
been iai6 before Congress by the Presi-
dent and the Secretary of the Treasury.
1t proposes in general return to the
tax system Of 1924. 1t adds certain
miscellaneous taxes, broadens the basis
Of income taxes by lowering exemp-
tsons, increases the normal rates on
incomes and also the surtaxes in the
higher brackets. These increases, 1t is
recommended. will run TO July. 1894,
or period Of two and half years, by
which time 1t is computed the present
deficit will have been reduced, If the
tai returns equal the estimates. to
about q normal condition. No definite
ccmputation Ia made on this score,
though It is expected that II the tax
scheme proposed yields the revenue
which experience indicates the gap be-
tween expenditures and income will
have been closed within thirty months.
These proposals are already under
criticism. Democratic opposition to the
administration plan has been imme-
diately expressed. There is objection to
making the tax increase apply to the
1871 incomes. to increasing the normal
income taxes and TO other features. In
ths House of Representatives, where
tar legislation must originate, and
whers the Democratic control is COM
plets, there win be eventually some
concrete plan Of revenue raising. 1t
viii probably differ In many respects
from that just submitted. Indications
point to refusal by the House to a
broadening of the income tax basis and
perhaps an increase in the rate of sur
taxes in the higher brackets. It is sug-
rested furthermore that the House may
adopt . revenue plan which will not
yield enough funds to balance the books
but win compel the adoption of policy
of borrowing to meet this emergency.
A. an alternative, in part, to the
general income tax revision to yield a
larssr return, . sales tax Is quite likely
to BE- proposed. The administration does
not recommend such . tax. 1t has,
howsver. many supporters. on the
ground that 1t is comparatively easy to
administer and is more certain Of re-
suits than an increased income tax,
specially In time OF diminished in
eonee.
Upon Congress rests now double re-
sponAbiiity. It must provide ways and
means not only Of maintaining the Fed
eral Government in solvcncy by lower
inx. II not wipins out. the deficit, but
II must keep the appropriations down
even below the figures of the past
through economies and by abstention
from new projects involving heavy costs.
The President has stated the condition
oS the Treasury. The Congress must
meet the situation.
Unfortunately this crisis climaxes on
the eve OF national election. 1t is in
escapable that 1t viii be faced in q
spirit Of political partisanship. Tax in
czeases are unpopular, especially in a
time Of general depression. The Demo-
cratic organization in the House will
naturally seek, for the sake of advan-
tase In the campaign that is soon to
open, to place upon the shoulders of
the Republican administration the bur-
den Of responsibility for the tax increase
proposal and for the necessity demand
Ing It, The interests of the people call
for treatment of the matter in a nom
partissn spirit, in q spirit of wisdom
and consideration for the public welfare
rather than for the advantage that may
Be derived from a political maneuver.