TAX REDUCTION

As a result of economy of administration by the Executive and of appropriation by the Congress, the end of this fiscal year will leave a surplus in the Treasury estimated at $383,000,000.  Unless otherwise ordered, such surplus is used for the retirement of the war debt.  A bond which can be retired today for 100 cents will cost the people 104 1/4 cents to retire a year from now.  While I favor a speedy reduction of the debt as already required by law and in accordance with the promises made to the holders of our Liberty bonds when they were issued, there is no reason why a balanced portion of surplus revenue should not be applied to a reduction of taxation.  It can not be repeated too often that the enormous revenues of this Nation could not be collected without becoming a charge on all the people whether or not they directly pay taxes.  Everyone who is paying or the bare necessities of fool and shelter and clothing, without considering the better things of life, is indirectly paying a national tax.  The nearly 20,000,000 owners of securities, the additional scores of millions of holders of insurance policies and depositors in savings banks, are all paying a national tax.  Millions of individuals and corporations are making a direct contribution to the National Treasury which runs from 11/2 to 25 per cent of their income, besides a number of special requirements, like automobile and admission taxes.  Whenever the state of the Treasury will permit, I believe in a reduction of taxation.  I think the taxpayers are entitled to it.  But I am not advocating tax reduction merely for the benefit of the taxpayer; I am advocating it for the benefit of the country.

If it appeared feasible, I should welcome permanent tax reduction at this time.  The estimated surplus, however, for June 30, 1928, is not much larger than is required in a going business of nearly $4,000,000,000.  We have had but a few months’ experience under the present revenue act and shall need to know what is developed by the returns of income produced under it, which are not required t o be made until about the time this session terminates, and what the economic probabilities of the country are in the latter part of 1927, before we can reach any justifiable conclusion as to permanent tax reduction.  Moreover the present surplus results from many nonrecurrent items.  Meantime, it is possible to grant some real relief by a simple measure making reductions in the payments which accrue on the 15th of March and June, 1927.  I am very strongly of the conviction that this is so much a purely business matter that it ought not to be dealt with in a partisan spirit.  The Congress has already set the notable example of treating tax problems without much reference to party, which might well be continued.  What I desire to advocate most earnestly is relief for the country from unnecessary tax burdens.  We can not secure that if we stop