The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-18
HOOVER sales
TAX PLEA TO
Be Rejected
Democrats to Answer mo,
Backed by RooSeveltS
Strong Opposition.
WARNS OF HUGE DEFICIT
President Declares LeVleS
Must Be Raised and
Expenses Reduced.
BY RAYMOND CLAPPER
United Press staff Correspondent

WASHINGTON, Jan. l8.-Desplte
President Hoover's new budget
warning, Democratic house leaders
still are opposed to the general
manufacturers sales tax.
They are having trouble in max
ing major reductions in expenses.
So it is largely on deaf ears that
President Hoover, in his latest bud
get message, released late Tuesday,
Numbered a call to make both ends
meet by joining new taxes and
economies.
Unless President Elect Roosevelt
should reverse himself in his con-
ference with his legislative generals
here Thursday, the Hoover program
for handing the government over
to his successor with expenses and
income balanced appeared today to
be doomed.
Roosevelt Is "HOrrified"
When Democratic leaders recently
decided the sales tax would have to
be resorted to, and it was intimated
that Mr.. Roosevelt was sympathetic,
word came back that he was "hor-
rhed' at the though. Hints that
income taxes would be made more
drastic brought such a quick cry
of anguish that this idea promptly
was disoWned by all parties.
President Hoovers warning, dis
patched to congress within few
minutes after the senate had joined
the house in overriding his veto of
the Philippine independence bill,
was to the effect that unless taxes
are raised and expenses reduced.
there will be a deficit of 100000
to $1,12OOOOOOO next year,
1t is this period for which con-
gress now is making the annual de-
partmental appropriations, He would
raise half of the deficit by new
taxes and wipe out the other half
by economies.
This outlook confirms the picture
drawn in recent United Press dis
patches describing where the tax
papers dollars goes.
Deficit Piles Up
The government ran behind $780,
100000 in 1881. 1t fell behind
$1,000, 100000 in 1882. This year it
is due to be $1,100,O00OOO short. Plus
the estimated deficit for next year,
this makes a total of $500 100000 in
four years.
This debt makes it necessary for
the government to borrow money by
selling bonds and short term securi-
ties. This year it will cost $725,-
100000 to carry the interest alone,
Next to the $1,OO00O0,0 900 veteran
cost, this interest charge is the larg-
est single item in the national
budget.
To reduce it, Mr.. Hoover suggested
converting high rate Liberty bonds
to lower interest bonds.
These are large, faraWay figures
to the average person. They will,
however, come home with sharp i'm
pact on those who make out income
tax returns between now and March
Is and discover that while their
earnings have dropped their taxes
have multiplied
Three Essentials Mentioned
In his message. Mr.. Hoover set
three essentials:
/. Maximum economies urged in
his budget message should be adj
hered to by congress
3 No new authorizations or APP
preparations should be made.
3. Even appropriations recon-
mended should be cut at every pos
Sible point.
Il regret to say that the same
forces are at work which thwarted
the saving Of several hundred mil
lions we sought to effect at the last
session of congress- Mr. Hoover
said.
He added that in appropriation
bills already acted upon by the
house, an appearance of saving had
been made. but that actually the
amounts ran S350O0000 more than
budget recommendations
Democrats Strike Back
Democrats Immediately accused
Mr.. Hoover of disappearing the
facts. Chairman ByrnS of the ap-
propriations committee told the
house that five appropriation bills
had been cut $50, 1855 900 more than
Mr.. Hoover asked last December.
Instead of spreading it over a
few scores of commodities ana serv-
ices at irregular rates, which cause
discrimination and hardship be-
tween industries" Mr. Hoover said,
1T would seem the essence of good
craftsmanship TO apply such tax
generally at a low rate upon all
manufactures except upon food and
cheaper grades of clothing, and
thereby give the federal govern
ment a stable basis Of income dur
ing the period OF depression