The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-11

vary all the way from $3.50. O00.O 900 to
$1.250. 100000.
Representative Longworth discussing
the subject to-day. said:
1.-THE final sales tax is infinitely better
than the turnover tax, because in no
case would II be paid more than once
and 1 think. in the majority of cases.
could not be passed on to the consumer.
But there are many objections to it.
Tax ON Surplus Fronts.
AT 1 per cent. the tax probably
would not raise more than $3.50, 000, 900.
1t would. therefore. be necessary II 1t
were to be used to supply deficiency
caused by the elimination of the excess
profits tax, TO make the sales tax at
least or per cent. That, in my judg-
ment, is too high a tax to put on general
consumption of necessaries of life. I
would be glad some day to see a small
final sales tax made part OF our per-
manent revenue system. l believe II
would have tendency to encourage
thrift and economy, but / don't think
such a tax ought to be more than l per
cent. and, of course, that would be en-
tirely inadequate to the necessities OF
the present situation.
Under existing conditions there seems
to be but one practical substitute for the
excess profits tax short Of radical in
crease In the rates of the income and
corporation taxes. That is a tax on the
undistributed profits Of corporations"
Representative Longworth's proposal
would be tax of about 25 per cent. on
the difference between what corpora
ton actually earns and what 1t distrib-
utes to its stockholders.
An average of the estimates that have
been supplied to the Senate Finance
Committee by recognized experts on eco
Monies and by officials of the Treasury
Department would Indicate that the rev.
enue to be derived next year at current
prices from final sales tax Of 1 per
cent. would be about $1,000, O0O, 900, or
approximately the amount produced by
the excess profits tax. Chairman Ford
ney of the Ways and Means Committee
of the House thinks this fair estimate.
Therein he differs from his colleague,
Representative Longworth, also a men,
Der of the Ways and Means Committee
The belief is pretty generally held
among the Republican members Of the
Finance and Ways and Means COM
mittees that there should be no in
crease in the taxation rates on indi-
viduai incomes. such as Secretary
Houston has suggested. The majority
ittl lHdl the SIldll STARRED man or
wage Garner is being hit hard enough,
and that any increase of the rates ap-
plicable to the surfaces would tend
only to encourage the practice of per-
sons with large incomes investing in
non-taxable securities and in that way
segregating funds that might otherwise
be employed in the legitimate expan-
sion of industry.
SmOot for Wool Embargo.
The proposal to establish an embargo
on the importation of wool. meat, hides,
wheat. oats and rye may be pressed as
an expedient. Senator Smoot is urging
it particularly on behalf of the wool
growers of the West. who feel that
their market has been broken by the
dumping of wool bought under foreign
war contracts upon the domestic
market.
The Smoot proposal, however, will
meet the serious opposition of Repre-
sentative Fordney. and it Is extremely
doubtful If 1t can be put into effect.
The Senator from Utah will have to
convince his colleagues that the wool
growers and not the commission men
are to reap whatever benefit accrues,
and in addition. the effect of such an
embargo upon the retail cost of cloth
ing will have to be seriously consid-
cred.
Senator Smoot has figures to show
that there are 800 900 900 pounds Of wool.
or enough to meet the ordinary de-
mands of consumption for twenty
months in the country. He estimates
also that 90 per cent. of this years
crop is still in the hands of the grow
ers, and that the application of the
embargo would not increase the price
of clothing more than from II to 10 per
cent, or approximately the advance
that might be expected to follow the
establishment OF "a protective tariff on
the product.