The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-08-21
IN TAX
AIDS THE SELLING;
THE DR|NKER PAYS
Newspaper Man Says Gut In
Revenue Rate Is For Purpose
of Increasing Sale Of Liquor.
AYERS BURDEN ALWAYS
FALLS ON CONSUMER
Higher Tax Has Effect of Gut
ting Consumption and of Re-
ducing Amount Received by
Government; Economic Side
of Case Discussed.

Government; Economic Side
of Case Discussed.
! Washington. D. c.. Aug. 20.-R. Ed
dy Mathews, of the Washington Blu
reau of the Christian Science Mon
itor, has just contributed an interest
| ing and Instructive article to his paper
dealing with the effect of the tax on
certain alcoholic liquors as far as
consumption Is concerned, and the
amount of Federal tax resulting. Mr..
Mathews makes the point that the
pending revenue bill carries de-
creased tax on certain alcoholic Ii
quors for the deliberate purpose of
! increasing the consumption material
ly and, incidentally. the total of gov
eminent tax. Mr.. Mathews states
that the liquor forces and those in
sympathy with them agree that high
tax means an increase In the retail
price of the product. tthe liquor al
ways letting the consumer pay the taxi
and this high retail price keeps many
people from buying the product.
Therefore, 1t was argued, lower the
tax and the greater consumption will
mean in the long run an increased
amount of money for the Federal
treasury. Mr. Mathews article fol-
lows:
"A deliberate purpose to replensh
the treasury by encouraging the pro-
duction and indirectly the consump-
ton of certain alcoholic liquors has
been disclosed In the pending revenue
bill. The increased rates on wines in
the emergency revenue measure OF
the last Congress have decreased the
consumption of these liquors in some
cases so to so per cent, this bureau Is
informed by one who has taken an
J active part in framing the bill, and
the revenue has fallen off seriously.
Now It is proposed to restore the old
rates to stimulate the business.
} Won't Pay Too Much.
What caused the consumption TO
3 fall off Is explained by the statement
} that the higher tax made a higher
price and the consumer will not pay
more than certain price for II at
retail.
"Of course It should he said that
, certain other factors enter into the
problem. 1t is admitted that extern
sve frauds have been practiced. with
/ the result that the government has
, not obtained. under the emergency
law. all the wine revenue TO which II
is entitled. The tax is payable by the
} retailer In the form of stamp put on
: each bottle before sale to the con-
=
understood. by emitting the stamp,
and by bartenders refilling stamped
bottles. But after deducting for
: frauds there seems little question that
the added tax has materially reduced
consumption. The pending bill pro-
poses to minimize this fraud by re-
| curing the producer to pay the tax
/ instead of the retailer.
Economic Side.
Then comes the economic side Of
/ the case The California wine in
) dustry. which is by far the largest In
the country, producing $4,000. 900 of a
total OF 100000 gallons in 1914 Is
said by those interested in 1t, to be
improbable because of the reduced
/ consumption resulting from the high
tax. They have been pleading their
cause with Congress ever since the
, emergency law was passed, and APP
pear to have obtained what they
wanted in the pending House act
Here are some comparisons:
Under the emergency act domestic
: and imported still wines carry fat
rate OF eight cents per gallon: the
8 pending bill places the rate on wines
according to their alcoholic content
8 as follows: On wines containing not
more than IA per cent OF alcohol (dry
wines) cents: on sweet wines GA to
21 per cent alcohoD 10 cents; on
! WlieS CON 81 I'd - per cent, 20
cents; on all containing moro than
"a per cent, $40.
The emergency revenue law placed
n rate Of SIS cents a gallon on all bran
, dy used in terrifying sweet wines: the
pending bill reduces this to 10 cents
This is the important reduction. for 1t
applies to most of the wines con-
sumed
Rates on champagne and other
{ sparkling wines in the emergency bill
were cents on each half pint or
. fraction thereof: the pending bill re-
duces it to 3 cents for all except arti-
flcially carbonated wines, on which 1t
is cent. The rate of 1-2 cents on
each half pint of liquors cordials and
. similar compounds in the emergency
bill. Is retained in he pending meas
urc.
Increase In Gallonage.
, For the first II months of the fis-
cal year ending June 80, 1915, the
revenue collected on wines and forth
flying brandy was s2,s50o0o, under the
emergency law It is estimated that
for the first six months would exceed
$2.70o,000. at which rate 1t would be
nearly s5,00000o for the II months
corresponding to the time accounted
for above, This would be jump
from s2.s5o00 to $4,000. 900 in rev.
elue al ter accounting IOF Ine TeuuC-
ton in rate on wine and on the forth
flying brandy, which would indicate a
gallonage increase much larger in pro-
portion.
THE controversy between tha Cali
fornia wine makers and those OF Ohio,
Missouri and other parts OF the mid
die eastern States enters into this
The eastern makers cannot use fer
mented grape brandy to fortify their
wines. because of the nature of their
product but must use distilled spirits
corn whiskey: the rate on brandy In
the pending bill Is 10 cents. while on
whiskey 1t Is $40. which puts the
eastern producers at a disadvantage.
They want the California makers put
on the same basis by making all pay
f.10, The SIS cents rate Of the emer-
gency bill was agreeable to them as a
com promise II was agreeable also
to the California Wine Association
who ID is understood stored nm some