New-York tribune., 1906-05-01
THE TAX ON ALCOHOL.

The Senate VIII show an unfortunate indif-
ference to public opinion If it fails to pass at
this session the House bill removing the inter-
nal revenue tax ON denatured alcohol used in
the arts. It has been recognized for some time
past that, compared with other manufacturing
nations. we have put an injudiciOus handicap
on industry by taxing an essential raw ma
terial at an excessive and artificial rate. Our
internal tax on alcohol is levied on the theory
that alcohol is a luxury-and a deleterlous lux
ury at that. The consumer is made TO pay for
his indulgence in liquors. as be is for his indul-
gence in tobacco. These duties have been in
sense corrective and have, therefore, been paid
without much protest. But, now that alcohol
has developed uses Of greater economic I'M
portance than the serving as the basis Of intox-
icating beverages the old theory Of taxation Is
challenged. If alcohol can be made source
of heat, light and power as well as a factor
in many manufacturing processes, it is clearly
mistake TO ostracize such an agent and to
limit its industrial usefulness by almost prohb
itlve taxation.
Hitherto the advocates of the free use of al
cOhOl In the arts have encountered two constant
objections. One came from economists who did
not wish TO surrender the revenue derived from
the present tax spirits of 81 10 a proof gal
Ion. In Fact when the WilsOnGOrman Tariff
law repe d the tax on alcohol used in the
the intention OF Congress as much ON the ground
that the Treasury could not afford TO give up
the revenue as on the ground that additional
legislation was needed to provide against frauds
in Withdrawals. The second objection has come
from persons who feared that untaxed alcohol
would go into general consumption largely in
the form Of medicinal tOnics. The Treasury
would thus be defrauded and an insidious form
OF intemperance would be encouraged. The VIII
going into medicines and alcohol used indus
trially. But by denaturing the alcohol with
drawn from tax the government can now pre-
vent its use for drinking purposes, and medicinal
compounds will continue to pay the same tribute
to the Treasury as other alcoholic mixtures sold
for human consumption. AS wood alcohol has
practically driven potable alcohol out Of the
market as q manufacturing agent, the govern
ment can lose little revenue by removing a tax
seldom collected, while, by giving the public a
cheaper source Of power and the manufacturer
a cheaper raw material, production will be stim-
ulated and the cost of heat and light to hun
dreds Of thousands Of consumers will be ma
terially lowered.
Denatured alcohol free OF tax will compete
with kerosene as an illuminant and with gas
oIene as fuel and a motive power. If it's pres
ent use is tripled or Quadrupled it will also Of
fer new market for corn, beetS and other agri-
cultural products from which alcohol is dis
titled. Undoubtedly wood alcohol will feel the
effects OF this new competition. But as wood
alcohol is likely TO be used as denaturing agent
for ethyl alcohol and for other purposes, its
manufacture will continue. Republican
Finance Committee, of which Mfr. 'Aldrich and
Mr.. Allison were members, reported tariff bill
in 1889, removing the duty on alcohol employed
in the arts and a Republican Senate passed that
measure. But the arguments in favor of such
action are many times as strong to-day as they
were seventeen years ago.