Federal Government's Need of Additional Revenue
Tax Plane Advanced by Administration Rpublicane
The accumulating deficit of the federal government for the fiscal year 1932 stood at $463,171,554 on September 15, 1931. The deficit on the same date last year was $313,797,335, and the fiscal year ended with a total deficit of $902,716,845. If this year's deficit accumulates at the same rate as last year's, the fiscal year 1932 will end with a new deficit of $1,332,429,301.
The continuation through the first quarter of the present fiscal year of the downward trend in federal revenues, in the face of mounting expenditures, has diminished the hope that increases in taxation at the next session of Congress may be avoided. Demands for fresh appropriations for relief during the coming winter promise to enhance the Treasury's difficulties, and Secretary Mellon is said to have in preparation a measure which would increase the Government's revenues by reducing income tax exemptions and restoring some of the excise taxes that were repealed in 1926. Meanwhile two other plans have been advanced by administration Republicans for consideration when Congress meets. Senator Reed (Pa.), a member of the Senate Finance Committee, would impose a general sales tax of one-half of one per cent; would repeal the capital gain and loss provision of the present income tax; and would increase estate taxes. Rep. Bacharach (N. J.), a member of the House Ways and Means Committee, would increase surtax rates on incomes between $100,000 and $1,000,000; would levy excise taxes upon luxuries and nonessentials; would increase estate taxes; and would reimpose an outright gift tax to prevent evasion of the taxes on estates. Whereas Secretary Mellon has advocated repeal of the federal estate tax, the Reed and Bacharach plans both propose increases in that tax.
Demands for Heavier Taxation of the Rich
Republican insurgents, who hold the balance of power in both houses of the new Congress, prefer the Bacharach plan to the proposals of Senator Reed or the ideas of Secretary Mellon. Bacharach conies very near, indeed, to stealing their own thunder. In a statement of September 10, 1931, he said: