AMERICAN BUDGET

Southland Times, Issue 21662, 26 March 1932, Page 5

AMERICAN BUDGET

DEFICIT INDICATED REJECTION OF SALES ■ TAX PRESIDENT DISAPPOINTED (United Press Assn.—By Telegraph—Copyright.) (Rec. 6.0 p.m.) Washington, March 24. The sales tax was struck from the billion dollar Revenue Bill by the House of Representatives to-day. The defeat of the sales levy in the House of Representatives by an insurgent coalition over the support of both Democratic and Republican leaders practically wrecks the carefully planned Bi-partisan Revenue Bill designed to balance an enormous deficit in the Budget. It is estimated that the levy would have raised 460,000,000 dollars. This loss, together with losses as a result of various minor amendments, leaves the Bill approximately 365,000,000 dollars short of the estimated 1,096,000,000 dollars needed.

The leaders of the Ways and Means Committee, which drafted the measure, were nonplussed at first and offered to turn the fiscal situation over to the insurgents to meet it as best they could. Later they reconsidered their decision and decided to call a committee meeting to consider new means of raising revenue. The vote followed a - protracted, acrid debate in which opponents of the tax successfully urged higher income taxes on large incomes. Some insisted that it was unnecessary to balance the Budget; instead the Government should issue Treasury certificates.

President Hoover is reported to be keenly disappointed. He believed that the balancing of the Budget was imperative to preserve the nation’s credit. Anti-prohibitionists took advantage of the situation and announced in the Press that the action to legalize 2.75 beer was calculated to raise 350,000,000 dollars.

A message published earlier in the week stated: After the House of Representatives adjourned in wild disorder on Saturday the Ways and Means Committee agreed to exempt a group of additional foodstuffs from the sales tax provisions in an effort to gather new support for the Revenue Bill. The House adjourned after opponents to the sales tax again bowled over party leaders on the major issue of the Bill. The acting chairman of the Ways and Means Committee, Mr Crisp, sponsor of the Bill, told the House that it was in no proper frame of inind to legislate and needed time to cool off. Representative Rainey (Democrat leader) went into the well of the House and urged members to keep order and support the Bill in the interests of the country. He concluded with the assertion, however, that it was necessary to adjourn the House to bring it to a realization of what it was doing. “This House, I realize, is a runaway House,” he said, adding that it had made a longer step towards Communism than any other nation but Russia in levying high surtaxes on Friday. “Fail to balance the Budget and you will make all those expenditures for reconstruction absolutely usejess,” he said. “There is only one worse step you can take than excessive income taxes—that is the step they took in Russia to eliminate wealth.”