Taxes & Scare

Since short-tempered Senate President Arturo Illas Hourritinier caned his job-seeking old uncle's head and then tried to punish the Havana press for reporting the incident, an irate band of his colleagues have been staying away from the Senate Chamber to forestall a quorum, force him to resign (TIME, May 31). Last week after considerable backtracking, President Illas did resign and the Senate went back to work. Elected as his successor, on the potent recommendation of Army Boss Fulgencio Batista, was Liberal Senator Lucilo de la Pena. Promptly Colonel Batista sent his mouthpiece President Federico Laredo Bru to Congress with a whopping $78,856,000 budget, $21,000,000 of which is reserved for Boss Batista's Army.

The budget, explained old President Laredo Bru, will leave Cuba with a $9,400,000 deficit, necessitating new taxes. The President proposed a tax of 1-c- a gallon on exported molasses, to bring in $1,600,000 yearly, a 5% tax on the gross product of mines, a tax on sugar used by national industries. A "forcible bill of exchange" for all credit sales, costing up to $200 on a transaction involving $50,000, would yield another $1,000,000, and a 5% tax on capital leaving the island $1,100,000 more. Biggest boost was suggested in the tax on resident foreigners, now $1.55 a head, which would be raised to $5 for laborers and $10 for businessmen, produce another $2,160,000. Most of Cuba's foreigners are Haitians and British West Indians, the most poverty-stricken of whom Boss Batista has been trying to repatriate. Since several of these provisions, especially the capital export tax, would conflict with the Cuban-U. S. reciprocity treaty of 1933, the President would reserve the power to grant exemptions.

Before they heard this bad news, the Senate had been thrown into a turmoil when four days earlier the lower house passed the most sweeping amnesty bill in Cuba's history. Under its provisions thousands of prisoners awaiting trial for political offenses and common crimes ranging from pocket-picking to murder, committed before May 20, would be turned out of Cuba's crowded jails. In addition, hundreds of political exiles would be free to return, even onetime (1925-33) President Gerardo ("The Butcher") Machado, now in Montreal where his secretary announced he would be likely to stay. If this move was calculated to throw a scare into Boss Batista's restive Congress it worked too well, for the Senators immediately forgot the budget to shriek that soon Havana would be full of dangerous scalawags and cutthroats, to say nothing of political enemies.

Only outright "gangsters and terrorists" were excluded from the bill. This provoked an ironical outburst from Representative Manuel Penabas and several other members of the anti-Batista bloc in the lower house, who claimed that they were being threatened by the Boss's musclemen. Cried Representative Penabas: "We are armed for any eventuality."

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