New Mexico state record., 1920-12-03
CHANGE TAX PLAN
AND REDUCE II. c. L.

Srecial to State Record.
Wash ngton, December 2.-That a
gross sales tax will be a relief rather
than an increased burden to the
people of the country is one of the
assertions made by advocates of
that form of revenue as a substi-
tute for the excess profits tax now
in force. The line OF reasoning fol-
lowed in support Of the assertion
) shown in an address before the
Ec nsn Club OF New York by Jules
). Bache, a prominent business man
OF that city. Mr.. Bache declares
among other things, that the pres
en-! tax system results in increased
pnces OF commodities to the extent
OF nearly IS per cent, whereas a
gross sales tax would no. increase
the price of commod ties beyond an
average Of 2H per cent AS every
one knows, what are called war
taxes" are mads the excuse for IN
rCe5 OF cmmodIties, the
increase bing out of all proportion
amount OF fhe tax. s.
however, the amount OF tax paid
CaL not be de ermined by the pur-
c nser OF commod ty, he can not
demonstrate the Injustice of the in
ceased price Under a gross sales
he amount Of the tax could be
definitely determined.
Mr.. Bachc is one Of the original
proponents and most aggressive ad-
coates of the gross sales or turn
over tax. His plan contempla,es
that there shall be charged a tax OF
4 per cent upon the amount of gross
sales where the total for the year
aggregate 5000 or more. This plan
would exempt nearly all farmers and
AL laborer5 from direct payment of
The tax, but, as Mr. Bache points
cpi, dley would all pay the tax in
in the purchase OF commo-
dilies to the price of which the tax
had been added by the seller
Answering the most common OBJ
lection made to the gross sales plan,
Mr.. Bache says:
1t Is cia med that as one per cent
l. added to the price of an article
with each movement that it makes
in passing on from the raw material
Stage through the hands of the man
jobber and retailer the az
pregaie tax in the end would be
large. Those of us who have given
cul me and thought to working out
this tax have as yet been unable
t) find an article on which the tax
would aggregate in its last move
ment into the hands Of the ultimate
consumer a greater amount than
lhree and one-fourth per cent. Com
lare that with the amounts which
the last years Of taxation have add
ed 20 the cost of liv ng under the
excess profits tax"
II is also asserted hat a gross
sales tax would tend to eliminate
lEddlemen and encourage direct
dealing by the producer with the
thus avoiding one of the
turnover taxes and reducing the
cost of d stribution which is a heavier
an on the country than would be
he gross sales tax itself. Among
reasons listed by Mr. Bache
n support of his plan are the fol-
owing:
1t will restore competition, enter
ir c and Indiv dual initiative, now
,nothered 10 death by the pursuit
II the tax gatherer.
1t will encourage business thrift
stopping the waste of high salaries
md extravagances which can then
10 longer be charged off against
axes.
Its collect on is simple and auto
ratic for both Government and tax
,ayer.
II is fair in its distribution, the
)ne who consumes the most and
rends the most pays the must in
axes
II has been in successful operation
n the Ph llippines for years and has