Onward to Reduction

It was evening when Vice President Dawes announced that the vote for adhering to the World Court was 76 to 17 and the resolution was passed. A moment later Senator Smoot of Utah, tall and grey, was on his feet.

"I move," he said, "that the Senate proceed to legislative session."

The motion was perfunctorily agreed to.

"I move," he said, "that the Senate proceed to consideration of H.R. 1, the revenue bill."

The motion was perfunctorily agreed to.

The clerk read the title of the bill: H.R. 1, to Reduce and Equalize Taxation, to Provide Revenue and for Other Purposes.

Then the Senate adjourned and Senators rushed out into the dark. When they reassembled next day the tax reduction bill had taken the place of the World Court as the chief item for consideration--an item on which there is just about as much room for difference of opinion. Technically the tax bill, as Senator Smoot reported it from his Finance Committee, is a non-partisan measure. The Democrats presented no organized opposition. But there was opposition. Some of it came from individual Democrats, the remainder from Progressive Republicans.

Senator Pat Harrison at once came forward from the Democratic side with a proposal to increase the aggregate reduction from some $350,000,000 to $500,000,000--presumably by reducing the amount of money set aside each year for retiring the public debt. The Democrats would like the reduction to be as large as possible so that another reduction cannot be made in 1928. They accuse the Administration of handing out small reductions periodically so that a reduction will be available every election year.

Here as in the case of the World Court the time factor enters. The Progressives, who want to fight parts of the tax bill, are almost the identical group that opposed the World Court. They feel that the regulars are "doing them dirt" in both cases: the World Court was rushed through to get at the tax bill and now the tax bill is being rushed through so as to get ready for the March 15 payments of taxes. And the Progressives are angry. They do not want to be hurried.

Senator Smoot, in charge of the tax bill, wants the bill passed by Feb. 10. Senator Norris, for the Progressives, suggested that the tax payment might be postponed from March 15 to April 15 in order to give more time for debate.

Senator Smoot picked up a nice cold snowball and spattered it all over this proposal. He said there were two ways of permitting longer debate: one was to let the taxpayers make their returns under the present law and give them rebates, but that was impracticable because some 2,500,000 persons would be relieved of all taxes by the new bill and to grant a flat percentage rebate would not give them their full tax reduction; the other method was to postpone the payments for a month, but that would leave the Treasury in distress because it has to meet $600,000,000 of short-term securities falling due on March 15. He declared:

"I have no desire to insist on unreasonable haste, but I want to see the bill become a law so the department can send blanks to Honolulu or any of the outside possessions in time so that taxpayers can make their returns by March 15."

As a way of getting rapid results, the entire tax bill was read over before the Senate, all sections on which there was no disagreement being approved and other parts of the bill being left for later disposition. In this way the normal tax rates (1 1/2% on the first $4,000, 3% on the next $4,000 and 5% thereafter) were approved, as were personal exemptions (of $1,500 and $3,500), earned income (25% deduction up to $20,000), and the repeal of the tax on the capital stock of corporations. But on the question of estate taxes, gift taxes, tax publicity, nothing could be done on such short order.