The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-09-23
HIGH PRICES DUE
=, TO TAXATION, SAY
COTTON SPEAKERS
Substitutes for Federal Sys-
tenn Suggested by Experts
at Session of National AS
ISOLATION of Manufacturers

MAPLEwOOD, N. H., Sept 2S-The
present system of federal taxation was
declared to have created ian intolerable
the continued high prices OF many ar
ticles, by. speakers at the opening SEES
sion Of the semiannual meeting of the
National Association of Cotton Manu-
facturers. Suggested substitutes includ-
ned by TSeSdoTe e. Pfee editor out Of
Commerce ard Finance, Of New York,
and a gross sale tax, explained by
VIM. e. Cornwell, of New York
well said. are becoming educated to
t<he fact that the whole system of taxa
ton in the United States is wrong,
adding that the system was founded
on class and sectional bias"
Two important sources Of the coun-
try's progress are being dried up by
operation of the excess profits tax and
heavy surtaxes on incomes, the speaker
said. These sources were surplus cap
"As to the first" he continued, "the
high taxes are driving people with large
incomes to invest as much as possible
in tax-exempt securities instead or fur-
nishing capital for, new business and l
Velopment.
And as to the second, extra profits
in business are being appropriated by
the government instead of being used
provide against losses in lean periods
which are bound to come"
The requirements of a good tax sys-
TEN, Mr.. Cornwell said, are that 1t be
versaiIy distributed. and that the col.
lection be simple. and easy instead OF
being complicated and irritating.
"A tax on gross sales is an ideal de-
velopment of these requirements ne
fractions and added through the vari-
Gus processes from the producer Of raw
material to stage after stage during
manufacture, the tax almost collecting
itself, accommodating automatically as
it proceeds, and is finally paid by the
consumer practically without his knowl-
edge, and the additions are so trtfling
as not materially to affect prices.
Mr.. Price in his address declared the
present surtaxes penalize success and
compel an enterprising man to pay. the
government an immoderate share of his
gains in profitable year, leaving him
to bear the losses Of an Improbable
year alone.
Explaining the employers privilege
tax, which he proposed as substitute
for the present system, Mr.. Price said
in pa" RSrt; and large, the great mass OF
things mankind consumes are the prod.
uct Of work on the farm and in the
mines, factories and offices. There
, fore, If the labor cost of these things
was taxed we SnOulu approximate dI
equitably distributed consumption taS
and, If it were supplemented by rea'
sonable income tax plus moderate sur.
taxes, we would, it seems to me-. bt
coming about as near as we can get tC
painless and fairly apportioned tax
"a manufacturer or merchant whose
monthly disbursements for wages, sal
aries or piece work totaled 100000
would at the end of the month send a
statement to Washington with a check
for the amount of his tax. If, the tag
were five per cent, his check would
be SIS, 900, which he would include in
his overhead charges and add to the
selling price of his product.
1.-The price paid by the manufacturer
of an entirely finished or marketable
product for the raw or partially fin
fshed material that he used would have
been correspondingly increased by the
employers privilege tax paid upon thu
wages paid to those employed in its
production, and thus the price at which
the article was sold for consumption
would include all the employers priv
lege taxes that it had to bear in IT.
progress from the first producer to thu
ultimate buyer"