Tinkering

" As sure as God lives and the sun rises in the morning there will be a soldier bonus law passed by the next Congress. Instead of talking about reducing taxes, the real problem is how to raise the funds for the bonus!" --Senator Smoot of Utah.

As regards a bonus, Senator Smoot's declaration is an interesting prediction--and one that is not unlikely to be fulfilled, because of the large increase of "insurgent" members in the next Congress. As regards taxes, the Senator's words are more than a prediction--they are an announcement. Senator Smoot, according to seniority rules, will be next Chairman of the Finance Committee and so-called " watch dog of the Treasury." In that position he will have an important voice in deciding the tax program for next year.

Secretary of the Treasury Mellon suggested several weeks ago that taxes be reduced. His reasons were that the income tax and the tariff are producing much greater revenue than was expected. Now Senator Smoot says: "No!" Consider the Senator's probable reasons: He considers the bonus likely to pass. This will call for much additional revenue. If any tax tinkering is undertaken, the LaFollette group will use every means to amend the bill by adding excess profits taxes, and larger income surtaxes. This result Senator Smoot and the regular Republicans are anxious to avoid. To meet the bonus, if it comes, regular Republicans will want every cent that is now being raised--they will want more, in fact, and even talk of using the British Debt payments for the purpose. But at all costs they want to avoid tinkering with the tax laws.

As for a sales tax to pay the bonus, it revives in whispers from time to time. Senator Smoot, like President Harding, was once for a sales tax to meet the bonus. His present remarks do not indicate that he will advocate it again, but he is evidently in search of new sources of revenue.