The New York herald., 1920-01-26
-aY GOODS MEN TO
OPPOSE SALES TAX
Will Resist Bach.- zach Measure
as Substitute for Excess
Profit System.
GENERAL IDEA APPROVED
Declare Proposed Exemptions Would
Require Intricate and Expen-
sive Accounting.

The National Retail Dry Goods Associa-
don is interested in a bill which has been
introduced in Congress by Representative
Isaac Rachrach, of New Jersey, and which
calls for the imposition of "a sales tax on
all purchases in place of existing excess
profit taxes and excise taxes that once
were. The association; while not agreeing
that the Bachrach bill as it now stands is
the proper measure. believes it to be step
in the right direction and expects impor-
tant developments as a result of its intro
duction. Officers of the association yes
terday issued the following statement by
way of comment on the measure:-
Tine introduction of bill by Repre-
sentative Bachrach for the purpose of sub
stituting a sales tax on all purchases to
consumers as substitute for the existing
excess profit taxes and the excise taxes.
&c, is an interesting development. 1t has
been evident for some time that sentiment
has been crystallizing both in Congress
and among business men in favor of flat
per centum tax on sales.
While the Bachrach bill in its present
form is far from satisfactory and would
in all probability prove even more clumsy
and difficult of administration than the
taxes which the bill aims TO repeal, the
introduction of this bill nevertheless is
distinctly important because it will have
the effect of focusing the attention of
Congress and of business upon the form
of tax with which it seems the excise and
excess profits taxes will ultimately have
to be placed.
Fundamentals Simple.
"The fundamentals of our tax problems
are really very simple if one does not make
the mistake Of being drawn off in abstruse
theories of taxation but endeavors to see
the thing as whole. Governor Coolidge
in one Of his recent public statements
made at the time of the shoe mems con-
Vention in Boston, went to the underlying
truth when he said Taxes have to be paid
by the public They cannot be imposed or
any class. There is no power that car
prevent a distribution of the burden The
landlord may be the one who sends d
check to the public treasury, but his ten.
ants nevertheless make the payment A
great manufacturer may contribute a
large share of his income, but still the
money comes from the consumer
This being recognized as an unavoid
able truth, the form of text to be applied
must be dictated by the manner in which
its distribution to the public can most cas-
lily and economically be achieved Facing
the necessity Of raising enormous sums fol
the federal government through taxation
business men recognize the obligation t.
collect a large part of the necessary rev
enue because business has the constituted
machinery for the effective distribution o.
such tax levies.
THE tax proposed in the Bachrach bill
probably would not be acceptable to busi
ness because it could not be administered
q easily and economically as ii should be
The first objection would be that this ia,
obviously must be collected from the
produce at the time of sale, which mean:
the perpetua ton of the difficulties facec
in the administration of such taxes a:
these now existing under section 904 Any
sales tax of this kind should be collectibl'
directly from the books of each business
house should be paid upon the net sale!
shown and should not be collected from
customers at the time of sale. 1t should
be permissible to include the taxes thu!
paid by each business concern as an item
of expense and in that way may be dis
tributed to the public. This is the faires1
and most democratic method, because eacf
consumer would then pay taxes in proper
ton to his purchasing power
Large Number of Accounts
Another serious objection to tax o
tbe kind proposed which grows out of thi!
Is the necessity for collecting the tax at the
time of sale lies in the proposal to exemp
sales of less than fifty cents Any system
of taxes applied directly to sales whicf
exempts some sales and makes other sale:
taxabIe must of necessity require large
number of accounts in the preserving o.
records in order that the stores may prove
that their returns are true returns III
other words, IL would be necessary to prove
what part Of any given volume OF sale:
was made UP OF sales of less than fiftS
cents The establishing of this fact woult
he a costly and difficult operation.
'eIf the tax of one per cent applied dl
-sctIv 70 sales of from fifty cents to $500
,s nrovided in the Bachrach bill, piece
~ merchandise sold at fifty cents woult
hsve 70 carry n tax of two per cent. be
couse the smallest American coin is on'
..rt The change of a one per cent tax tS
/, five per cent tax on sales OF more tnai
,soo also would prove difficult OF admins
.ya.;or and would be essentially unfair.
.orbe Taxation Committee of the Ma
,,oraI Retail Dry Goods Association ions
~. considered this subject and has re
,,,osted the chairman OF the Ways and
,,aans Committee for a hearing before an,
,ctive steps are taken for change 10 th'
nresent revenue law.
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