Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-16
Senator Watson ReverSeS
Own Stand and Indicates
Republican Position After
Farley With Hoover.
FORM OF NEW RATES
STILL PROBLEMATICAL
Upper Bracket Incomes Probably
Will Be Hit, and Sales Levy,
Favored Now by Senator Smoot,
May Be Legislated-Treasury
Fears $2,ooo,oOo,OOo Deficit.
BY the Associated Press.

BY the Associated Press.
Congressional Republican leaders
agreed today to sponsor tax increases
at this session.
Senator Watson, the Republican
leader, who has consistently opposed
new taxes at this time, said after
conference with President Hoover that
a boost is unacceptable.
At the same time Chairman Smoot
of the Senate Finance Committee an
nounced there will have to be further
taxation"
c. 0. p. Tax Program.
WatsonS reversal was accepted on
Capitol Hill as settling a Republican
tax program.
What form of new or increased rates
will be recommended is uncertain,
pending further conferences between
congressional leaders and President
Hoover and Secretary Mellon.
While both Senators Watson and
Smoot favor a sales tax, they agreed
it was very problematical that Congress
would approve such a plan.
Increased rates on the larger incomes
appear certain.
Senator Watson would not state the
Presidents views on the tax problem.
but the fact that he changed position
after his White House visit was in
terpreted on Capitol Hill as sure sign
that the administration would recon-
mend new taxation.
Fear $4,000, 100000 Deficit.
Treasury officials fear a deficit this
year of almost $2,O00,000, 900. 1t is
known that Secretary Mellon would not
like to meet this gap by borrowing with
out congressional authority.
Watson believes that both increased
taxation and additional borrowing by
the Government will be necessary this
year. The deficit last year was $685.
100000.
AS for the general legislative pro-
gram, Senator Watson believed the
President would sent up his recon-
mendations without any specific plea
for partisan or non-partisan considera-
ton.
1--WE cannot presume that politics
will be played, watson said, there
fore there is no reason to plead against
politics. Certainly the President can
not be in the position Of begging and
supplicating."
Increased taxation was declared nee
essary today by Senator Smoot upon
his return to the Capital
While keeping an open mind on the
form of new taxes to be sought, the
Utah Senator expressed favor toward a
general sales tax. He was not GER
tain, however, the Senate would ap-
prove such levy.
Confident Worst Past.
Smoot, who is now dean of the Sen
ate, came back to Washington conf
dent "the worst has passed and bust
ness from now on will be on the up
grade" He urged a resumption OF
buying.
The Senator said he was opposed to
cancellation of the war debts owed to
America by the allied nations.
He urged that something be done to
restore silver as an assistant to gold
in world commerce.
Smoot said strictest economy in Gov
eminent appropriations is vital.
The Senator will go into early con-
ferences with President Hoover, Secre-
tary Mellon and House leaders on the
Government revenue situation.
1T is quite evident" he said, that
there will have to be further taxation.
1 have not fully decided what is the
best course to follow. In messages I
am receiving the subject of a sales tax
is being considered by people who in
the past were opposed to it.
Easiest Revenue Source.
1T may be possible to secure passage
of a sales tax, but l am not yet pre-
pared to say that the Senate would
agree to one. 1t is the easiest and
surest way of raising our revenue and
in my opinion a small tax on ultimate
sales would be absorbed by the seller of
the goods rather than be passed on to
the consumer. That is, a tax of one
half of per cent or per cent on ulti-
mate sales in more than half the cases
would not be imposed on the ultimate
consumer
If the income tax is amended, no
DOUBT the greater incomes will have to
pear most of the burden.
Every item of an appropriation
should be scanned as never before and
Continued on Page 2, Column A.