Prophet

"I feel certain that surtaxes will be reduced and have no doubt that the surtax will be brought down to 25 per cent and perhaps less. . . . Nobody can tell definitely how much we can reduce taxes next session until after the June payments are made and the returns are examined." So the Chairman of the Senate Finance Committee -- so Reed Smoot of Utah.

Mr. Smoot is not the son of a prophet, but he is the man who said two years ago: "As sure as God lives and the sun rises in the morning, there will be a soldier bonus law passed by the next Congress."

In Alabama, Senator Oscar W. Underwood addressed the Alabama Tax Clubs at Montgomery. Said he:

"If I had the power to write the tax law, I would go back to the tax of 1916, where the highest bracket of the surtax was 13%."

Senator Underwood is facing a very dubious chance of reelection next year. Recently, he purchased an estate in Virginia, whither he expects to retire in due time. Some conjectured that he is making a last effort to rally support. Yet Senator Glass of Virginia recently advocated a 20% maximum surtax and ether Democrats, in spite of their last year's opposition to the Mellon plan, seem to be edging towards a compromise with lower surtaxes.

The latest estimate of the Treasury is that there will be a surplus of $120,000,000 for the fiscal year ending June 30. This surplus will, as usual, be used in reducing the short-dated debt--that is, Treasury Certificates, etc., falling due will be redeemed without others being issued against them.

Some politicians, many of whom are especially interested in the Congressional elections in 1926, propose to add this surplus to an expected surplus next year, making a combined "surplus" of $400,000,000 or more, and are talking of a "half a billion dollar tax cut." They also propose personal exemptions of $5,000 and abolition of all "nuisance" taxes.

The Treasury thinks "half a billion" is too much--is talking about $300,000,000 -- and wants this reduction made principally in surtaxes and estate taxes.

The Treasury reported, last week, the income taxes filed last year (which were on incomes in 1923) :

The taxes totaled $703,962,165 (as compared to $861,057,308 the year previous). The decrease was due to the flat reduction of 25% made in that year's taxes.

The total of the incomes on which taxes were paid was $26,336,337,843 (five billion greater than the previous year, three billion greater than the previous highwater mark in 1920).

The number of persons paying income taxes was 7,698,321 (910,840 more than in the previous year).

The number of $1,000,000 or more incomes reported was 74. (Previously it had been: 1914. . 60 1915. .120 1916. .206 1917. .141 1918. . 1919. . 65 1920. . 33