The sun., 1918-10-18
Mr.. smoot's Consumption Taxes.

Mr.. Shoots Consumption Taxes.
How much horse sense and revenue
efficiency the Senate can force into
KITcHIN's dangerous tax bill remains
to be seen. The House Of Representa-
tves may or may not accept sound
and simple methods of raising revenue.
Compromise with the Kitchln mon
strosity may be unavoidable. But in
the Senate, as Developments before the
Finance Committee show, there are
brains enough and courage enough to
devise schedules which while supply
ing the immediate needs Of the Treas
ury will not rock the business of the
nation like an earthquake.
Nothing could be simpler than SEN
sator SMooT's proposed amendment for
a minute tax on sales. Nothing could
be safer. Nothing could be surer to
pour revenue into the Treasury. The
,Smoot proposal embraces two sugges-
tons. One, which is the very essence
Of true consumption tax, would tax
. every sale to the consumer. The tax
would be so low that in whole year
1t would amount tn only few dollars
in the case Of person or a family
that spent, say, $50 month. or SO
month, or even 800 month on ar
ticles of consumption. Yet, because
the person or family that spent $1,000
month, or $4,000 month, or what
ever you please, would be paying cor
respondingly, the total revenue which
could be produced is estimated at
$1,25OOOO.OOO.
The other suggestion would take
the tax every time the article passes
in barter from one hand to another
all the way from the original pro-
ducer to the ultimate consumer. The
grain, for example, would pay going
from the farmer to the elevator going
from the elevator to the flour mill 1t
would pay again: going from the -four
mill to the jobber 1t would pay still
again; and so from the jobber to the
wholesaler; from the wholesaler to
the retailer; from him to the bread
eater. This would produce pro-
diglous revenue, estimated at more
than three and n half billions of
dollars year.
Doubtless. however, whatever the
attitude of KITCHIN, economically as
blind as bat, and the blind follow
ers whom he leads, the Senate itself
would prefer consumption tax that
did not repeat itself too frequently
down the line. Perhaps the Senate
might find more acceptable a happy
medium of, say. two taxings, possibly
one at the passing Of the article from
the hands Of the original producer
and one at the passing of the article
finally into the hands of the ulti-
mate consumer.
In any event, here is tax, either
IN Its very simplest form or In a re-
peating adaptation, which could hurt
nobody in the whole United States,
because nobody would pay much I'M
less he bought much; which would
interfere in the least possible degree
with the natural working Of the ma
chlnery of economics, and which
would create revenue every month
in the year, every week in the month
and every day in the week, without
the violent and disastrous disturb
ances which convulse our whole in
dustrial fabric when billions of dol
lars are wrenched with one stroke
out Of factories, mills and marts, as
the Huns might snatch statues out
of churches. paintings out of mu.
seums and silver out of homes, burst.
ing the walls open in the climax OF
the devastation.
KITcHIN, we say, may not listen to
rational taxes and to effective taxes
in place of his blue ruin taxes; but
at least the Senate can put this thing
up to the conference committee in
such a way diat only economic mad
men would still persist in his policy
OF scuttling business north of Mason
and Dlxon's line.