Tax Talk

It was with a shrewd move that President Coolidge sought to counteract the Democratic fervor which grew loud with the election returns. He knew that as soon as Congress opened in December there would be a clamor for a general tax reduction, that Senator Furnifold McLendel Simmons of North Carolina, ranking Democrat on the Finance Committee, and many another anti-Administration man would champion such a plan. So what could be wiser than for the President to be Champion Tax Cutter No. 1? In the first Cabinet meeting after election day he explained his scheme, then he held a short conference with Secretary of the Treasury Mellon and General Lord, Director of the Budget Bureau. It mattered not if the general policy of Mr. Mellon was to use Treasury surplus to retire the national debt; this time the President had to make a political move and make it quickly. The announcement came from the White House: A study of the revenue returns shows a surplus in excess of $250,000,000; hence the President will recommend that Congress speedily vote a 10% or 12% rebate or refund on the income taxes payable in 1926 for incomes of the calendar year 1925. This applies to all corporations, industries, individuals, but not to so-called nuisance and admission taxes.

Immediately Republicans began to point with pride; many a businessman from Wall Street to the Golden Gate was pleased. Senator Simmons reflected the Democratic opinion, said:

"The President's announcement will be pleasing to the taxpayers of the country, because it indicates a willingness to concede to them what he persistently denied before the disaster which overtook his party last Tuesday.

"Of course, the announcement amounts to a humiliating surrender for the President and the Administration and would never have been made except to coyer retreat; but it is artfully devised to mislead the country and to deny the taxpayer the full benefit of relief to which he is entitled. . . ."

The Democrats plan to fight the President's refund plan with a higher ante--a general tax reduction in the lower brackets of incomes and a cut in corporation taxes of 10% to 13 1/2%.

Cautious Reed Smoot, most eminent Republican financier in the Senate, said that not more than a 10% reduction was advisable.