New-York tribune., 1919-03-17
Holds Luxury Tax
Checks Business
AT Its Source
Franklin Simon Believes Cost
of Collection Will Exceed
Amount Derived by U. s.:
Cites Inequalities in Law

49, 1" oI11oH' March 16.-Frankl;,
SIMON, the New York merchant -,
IS mere on a vacation, expressed W.
opinion to-day that the lux,ru
"hich goes into effect May viii, NJ.
yleld the cost of collecting it. pos;sS
proving great inconvenience to hue
ers ne believes that it will imno..
burden on industry at a time VIII.
industry needs all the aid the oo,..-
ment can give it. A far better mo.l.,
OF taxation, he suggested. would liesnoo VA
tax of l per cent on all mercbsnJa Je
collectible from the customer, ;ns.aSS, ;tase,
Oh the present provision of a IN naa
cent tax on specified articles Gcrppel pe,
only on that part of the purcha So nr;sa usea
which IS above a specified lim;t Pi'oe
The law says" MIR. Simor
pialned, that on and after Nav 81.
merchant must collect from The oaa sne
toner and turn over to the oo,,os ous-
ment' Tor instance, 10 per cent of thn.
part OF the sale price of all women,s
SVoes wv sold winch is in excess of s1o
business 5000 pairs of shoes thst u,;,I ,,ix
go on sale at that price. The e''aS eynsal VIII
taxable will average about 81 n. ~Ncess
upon which the government viii ea.a, al.
aDoue ~ cents per pair if they wsrs
a. ali solo at that price. though MANY of
them VIII be reduced. The hest sc. "
tenn we have been able to devise 70.
nanollng the collection of this tav WI w.
9ulfes the entire time of four neoria.
ehat Is, We must put on four mor.
Clerks IN that department for s;S
months period, and they must becoms @
accountants. s'oi'e
=, Now if we sold the entire lot ~
shoes at the scheduled price ,WI wS;.h y.
is al impossibiiity, the rovernmar. mmars
laH collected would be 40 cents nor
pair on the average, or total "SS os se per
2O0. That will be approxjmatelv r. r.
same as the additional salaries ro we
nave to pay to collect this tax, being
equal TO about $25 per week for each
new employe required In some de-
partments the cost Of collection will
run higher. Imagine a bargain tahle
for instance, in the centre of a crovd
or women, each grabbing for what she
wants and expecting quick service
Inc salesWoman there must go THROUGH
the additional operation in each case
OF determining the amount taxable
ana computing and collecting the tax.
wh'ch means her time and means that
the customer will have to wait.
CoiIecting Expense Heavy
When you apply the tax law to tho
merchandising of the country as
whole you first find that 65 per cent
OF the total sales are accounted for on
cash registers. Either the governments
must put in thousands of auditors. or
merchants IN small stores will have
20 change their system at an additional
expense, probably more than the
INV
may come directly out of the merchant
it must come indirectly from the pub-
lie, and the net result is a large eco
nomic waste.
The entire matter would be simpli-
fed and the returns much enlarged
by adoption of l per cent tax on all
merchandise. You buy, say, S25 worth
OF merchandise, which figure shows in
the. total of your charge or of the
cash you pay, and it is simple mat
ter to figure that the tax is 25 cents.
and the amount is SO small that YOU
do not care. That would be very
simple. You do so much business,
you owe the government l per cent Of
1T, you collect from the customer
per cent eliminating almost all Of
the work now necessary, and also
countless questions that will come I'D
NHNSh e'AS INV loW anu Will nave 10 De
ruled upon. For instance, there is a
tax on ladies' underwear There is
no tax on corsets. Is a corset lady's
undergarment? | maintain that it is
not. Underwear in the trade is gar
ment worn next to the skin. This is
just an instance of ambiguity in the
law as it is drawn, and of these there
are any number.
Opportunity for Fraud
Cooperation of this law also opens
up avenues of fraud that would not
exist if the provision had been for
a straight tax on all merchandise.
Suppose a merchant decides that Q
corset is underwear and collects the
tax from the customer. and later the
government decides that it isn't? How
is he to return the money? The same
would apply to many other articles.
There will also be tendency for the
merchant to raise the price of en-
article to cover the tax. but raise II
more than the tax. Then how are you
to tax from the records of the cash
register? If you check back every
sale and compute taxable exeesses
and the few cents taxes OH them the
work is endless and will require an
army Of accountants.
considering the thousands Of small
stores operating on cash registers, ard
that they constitute by far the mass
OF the trade, who Is 10 supeflBtehd
such eelleetiens7 The government II
The government makes such concerns
put IN accounting systems the cost
will be very great, If IL does not do
so how are you to tell what Is owed
1t Will probably work out that the
large merchants pay the tax and the
little ones don't,
Discrimination Pointed Ont
Further examination of the new
tax discloses other forms OF injus'
tice, the levy on stockings, for eN-
ample. A pair of silk socks for which
the purchaser pays $1.50, a standard
figure for good quality, carries an I'M
post of 10 per cent on the amount
above the dollar, or cents. A pair
of woollen golf hose. or woollen stock
ings, costing, we will say, $40, is tax
free. There are determinations in
favor of cotton goods also.
"A man can go to his tailor and be
measured for evening clothes, costing
$3.50, and pay no revenue to the gov
ernment. But shirt priced nt 50
carries a 10 per cent levy on the
amount above SO, and so on. 1t would
take page after page to enumerase
such discrepancies.
ANY tax levy at this time tending
to curtail production and reduce con-
sumption is not a practical measure
1t is the height of folly to check tne
current of business at the source OF
the stream"