Evening star., 1931-12-11
DEMOCRATS SPLIT
ON TAX PROBLEM
Party Needs TO Get Together
on Alternative for Hoover
Proposal.
BY DAVID LAWRENCE,

Although President Hoover's tax plan
30 revive the 1924 revenue act has met
stubborn resistance in Congress, no al
Tentative program has come as vet from
the Democrats in either House.
When IL does come, the probabilities
are its main features viii include O
clause postponing the tax increases un-
til the March, 1888, payments SO they
VIII not affect incomes earned during
the calendar year 1881, and sundry re-
visions of the schedules whereby the
lower brackets viii not be taxed as
heavily as In the administration
Increase Hs Opposed.
This is indicated by several Senators
on the Democratic side and members
OF the House Indeed, there is a no.
ticeshle sentiment against any tax in
crease whatsoever at this time. Instead.
{ men Ike Senator Copeland Of New
York are urging q bond issue TO take
care of the whole existing deficit. Hh
plea Is that the country retired the
national debt rather quickly and is five
billions ahead Of schedule anyway,
The Democrats In the House. how
ever, have the responsibility of pro-
posing fiscal plan and they are not
likely to avoid it by presenting a pro-
posal 10 borrow the entire deficit The
main difference ultimately between
their plan and that Of the admins
tration will be the extent to which each
proposes TO use, the taxing power and
the Borrowing power
feeling that the administration pro-
posals are too drastic for the present
sttustion, the Democrats may suggest
Q sliding scale, or rather a gradual in
PRODUCTION OF higher taxes, in the hope
that the year 1882 will prove better
for business than 1881. The Democrats
are clearly opposed to adding burdens
at this tinse and curiously enough they
are adopting a conservative position
which, If originally taken by the ad-
ministration- would hsve brought the
latter plenty of attack from its po-
hticai opponents.
Party Must Organize Policies.
Generally speaking, the Democrats
are By no means united on what tax
policies should be and II will take a
little while for them 10 get organized
and make up their minds what should
be done
The next few days viii see nanv
meetings Of the Democratic Policy
Committee, which Is composed Of mem
befs OF the Senate and House. Poll
ties will have IFS battle with econorn-
les. The political side of the picture
is TO keep as many people with low
incomes exempt from any tax pay
ments. The economic side is to broaden
the base so as 10 include more tax
payers The higher brackets will not
escape severe tax rates, but everybody
Knows that the past business year has
oeen calan1itous one for the higher
brackets, toe. 80 any tax program
based on that alone is doomed to be
unproductive OF the expected revenues.
Capital Losses Offer rrcbieu.
One of the most perplexing ques-
tions is that which has TO do with
capital gains and losses. III the rres,
ent system is maintained and taxpayers
can write of in March, 1892. the Losses
sustained In 1891 the higher bracket
people viii not be paying the Treas
ury much money. On the other hand
II it is insisted that the losses cannot
De deducted, some Of the larger tax
payers may become financially strained
In order 10 raise the money 10 cav
their taxes.
The chances are that there will be
bitter fight on any retroactive tsx
legislation and that the final law will
pe combination OF the administration
plan and certain revisions involving
general and indirect taxes. The Demo-
ocratic insistence on avoiding new
taxes based on 1881 incomes In ali
probability viii prevail because of its
popularity. As for the administration,
! 1t probably would find II better TO con-
ceoe this point than TO see an extensive
borrowing program adopted as the fiscal
policy of the Government.
The present prospect Is that the I'M
certainty with respect 10 new taxation
VII not be removed completely before
the FIRST of January, though press,,re
70 decide the issue more quickly ia
coming from all sides, especially since
losses on securities can be taker, oriy
II sold before December 81, 1881.
CCopyriaht. 1917