The sun., 1918-10-17
SMOOT PROPOSES
TAX ON ALL SALES
Would Levy Assessment Of 1
Cent on Each Dollar or
Fraction Thereof.
SENATE MAKES HEADWAY
Tentative Changes So Far AZ
feet Only the Operation
Of the Act.
Special Despafch to Tn sux.

WASHINGTON, Oct Ex-senator Smoot
(Utah) will place before ths Senate
Finance Committee at an early. session
amendments looking to the adoption of
q direct sales tax to replace by a single
item many Of the harassing minor i'm
positions OF the Kitchin bill. He an
ncunced tonight that he had prepared
alternative amendments with this end
in view.
One Of them. the more favored Of the
two. provides for a direct tax on every
transaction in excess Of 20 cents, of one
cent for every dollar of the amount Of
the transaction. It Is estimated to have
q revenue production power OF $780,.
100000. The other proposal Is for q
sfmilar tax of one cent on every dollar
OF commercial transactions. collectible
on all sales, upon the sale by manufac-
turer to wholesaler. wholesaler to
3Cbber. jobber to retailer and retailer
to- consumer. The alternative sales tax.
Senator Smoot said tonight. would
yield $500. 100000 to the Government
The underlying purpose Of the pro-
posed tax Is n combination Of what the
Senate revenue trainers believe to be
essential notifications of the bill as
weil as replacement of the revenue GER
tain to be lost to the Treasury when the
bone ,dry law becomes effective on July
4. 1919.
How the Tax Would Work.
Senator Smoot made It clear to-day
how the proposed tax would be applied
in the event that the retail tax scheme
should be adopted. A purchaser buying
any number of articles at a single pur-
chase would pay one cent on every
dollar or fraction thereof of the gross
amount. He said the utmost limit Of
taxation to the person earning but $1,000
. year would be approximately $40.
1t Is believed that the sales tax scheme
win prove popular in the Finance Com
mittee. 1t Is recognized there that the
Kitchin bill with Its manifold tax impo-
sitions and the vast qualifications Of the
proposed law, making collection Of so
many taxes a great burden on the
Treasury. Is a cumbersome enactment
which must be revised before II can
prove an efficient revenue law.
Whether the Finance Committee will
adopt the retail sales tax or prefer the
more universal levy with its stupendous
revenue producing power Is matter TOT
the future consideration OF the commit
10
Changes Made in COMMITTEES.
The Finance Committee has voted to
reduce the penalty for not making a tax
return in the prescribed time to rs per
cent. OF the amount OF the tax instead Of
80 per cent, as in the Kitchin bill. It
also voted to reduce from 100 per cent
to SO per cent. of the amount Of tax the
penalty for classifying tax returns. The
10 per cent. tax on cash registers was
stricken out.
The provision for appropriation Of 81
500, 900 for expenses of assessing and
collecting internal revenue taxes was
modified by striking out the specification
OF the House bill that employees should
be appointed from the eligibles on the
civil service list. Instead the committee
inserted the provision that these en-
ployees shall be appointed In accord
ance with law" This was taken by some
TO mean another attack on the civil SER
vice system. but this suggestion was de-
MED by the proponents of the change.
who asserted that "in accordance with
law" was a direct way Of enforcing the
existing civil service law. and that other
specification was unnecessary.