A HUGE DEFICIT

Poverty Bay Herald, Volume LIX, Issue 17957, 8 December 1932, Page 7

A HUGE DEFICIT

UNITED STATES FINANCE 1 I STATEMENT TO CONGRESS SALES TAX ISSUE, REVIVED (Elec. Tel. Copyright—United Press Assn.) (Received Dee. B, noon) WASHINGTON, Dec. 7. The turbulent sales tax issue was tossed squarely back into the lap of Congress by the Secretary of the Treasury, Mr. Ogden Mills, with a recommendation that a 21 per cent, general manufacturers’ levy should be adopted. In his annual report, the secretary said the present specific excise taxes adopted in the last session of Congress failed to produce the expected revenue, lie proposed their repeal, and directly asked the House to reverse itself. Only six moiiths ago that body voted down a 13 per cent, sales tax after a study of the Canadian sales tax method. The issue was not even brought to a vote in the Senate.

A drastic reduction of Governmental expenditures was insisted upon by the Secretary, who predicted that the present fiscal year would end next June with a deficit of £229,200,000, and the Following year, at the present pace, a deficit of £61,400,000, exclusive of delft retirement. He said Government spending could he reduced by £96,000.000 in the 1934 fiscal year if the recommendations made by the. Preisdent in his Budget message were followed. It was not feasible, he said, to provide for the resumption of a normal reduction of the public debt in 1934, but urged that otherwise the Budget could be balanced. The Secretary said that while it had been established last May that the income of the Government in the 19 7 ’3 fiscal year would amount to £619.600.1X10. revised estimates indicated that they would total only. £525,000.000. Custom duties were now estimated at £58,000.000. a drop of £12.000.000 from the Mav estimate. Income taxes at £172.000,000, showed a drop of £35,200,000. SILENCE ON 1 WAR DEBTS .Mr. Hoover to-day presented to. Congress a drastically reduced Budget recommending a per cent, manufacturers’ excise tax, the retention of the gasoline tax, and rigid economics, including an additional 11 per cent, cut in Government salaries and a big slash in veterans’ benefits. He asked for total appropriations of £843,761,670, saying the net expenditures would total £651,270,980, against receipts of £589,832,543, leaving a deficit of £61,438,437. It was to offset this that the new taxation was proposed No mention of war debts was made in the Presidential message, but the report of the Secretary, Mr. Mills, sent simultaneously, disclosed that the payments due from foreign nations had been included in striking the Government’s balance. Neither did the President make any mention of the legalisation of beer, the estimated internal revenue collections including no figure from this source. In his veterans’ economy proposal, the President defied the clamoring for payments of a bonus and the maintenance of the present benefits by recommendin''- to Congress legislation which would strip £25,400,000 worth or pensions, compensation, and allowances olf the rolls. The new sales tax is estimated to yield £71.000.000. The Budget provided £117.495,400 for national defence, compared with £126,493,200 last year. The largest item of'the estimated expenditure is £186.415.400 for ex-service, men The Navv Department appropriation is £61.600,000 and the War Department £55,200,000. 'J;he naval appropriation includes some £BBO,UOO for the modernisation of two battleships and £7.769.000 for the construction of new vessels, including two Bin. gun cruisers, and four destroyers