The Alternatives

The Administration's tax reduction plan (TIME, Nov. 19) has placed the advocates of a soldier bonus on the defensive. The majority of them are advocating both a tax reduction and a bonus. They suggest chiefly three alternatives to abandonment of a bonus:

1) That the bonus can be passed if only part of the tax reduction is made. William G. McAdoo suggested an issue of 50-year bonds to finance the bonus. He calculated that these bonds could be retired by an annual outlay of about $90,000,000. John Thomas Taylor, Vice Chairman of the National Legislative Committee of the American Legion, advocates the bonus bill which will be introduced in the next Congress by Representative Green of Iowa, which it is estimated would cost an average of about $87,000,000 over a period of 44 years.

2) A tax of 1.5% on all wholesale sales to pay the bonus. Opposition by business interests prevented such action in the last Congress.

3) Modification of the Volstead Act to permit the sale of light wines and beers, to be followed by a tax on these beverages to pay the bonus. This was suggested by the New York Daily News, offspring of the Chicago Daily Tribune, and generally reflecting the opinions of Senator McCormick of Illinois. As a practical possibility this suggestion is negligible if not ridiculous.

The last two suggestions can be dismissed as unlikely to receive serious consideration. The argument of those favoring the first alternative follows approximately the expression of the above-named John Thomas Taylor: " Shall 22,000 millionaires--men who profited greatly out of the War--have their income taxes further reduced by $85,000,000* a year, or shall 5,000,000 soldiers and their families be now paid the just debt owed them by the nation for five years? . . . According to the figures prepared by the Treasury Department for the Senate Finance Committee, the soldiers' measure will cost $242,000,000 for the first three-year period, or an average of slightly more than $80,000,000 a year. ... It is unpardonable for the Secretary to try to fool the nation into believing an untruth, that $80,000,000 taken from $323,000,000 leaves actually nothing at all."

* The genesis of this figure is uncertain. According to Mr. Mellon's plan the tax reductions for millionaires would total $29,310,000 as compared to $193,390,000 to persons with smaller incomes. To calculate a tax cut of $85,000,000 for millionaires it is necessary to include persons with incomes of less than $10,000 in the millionaire class. The abolition of amusement taxes and telegraph and telephone taxes, proposed by Mr. Mellon, cannot be supposed to affect chiefly the 23,000 millionaires.