Every evening, Wilmington daily commercial., 1920-05-10
NEW YORK SPENDS
1,2OO,OOO,000 FOR
LUXUR|ES IN YEAR
More Laid Out for Candy Alone
Than for Jewels. Furs and
Autos Combined.
ICE CREAM SODAS PAY
HUGE SUM TO TREASURY
nv Associated Press to Every Evening

ny Associated Press to Every Evening
New York, May 10-Luxury buying in
New York is now going on at the rate of
S 200, ,00O,O 900 a year, Judged by the
amount Of luxury taxes aRgregating S10,-
100000 q month-which are being col
lected by William H. Edwards, United
States Collector Of Internal Revenue for
Manhattan. In February, according to
the collector, the government received
from his Office, s., ,000, 900 more in luxury
taxes than was paid iii any previous month
in the history of the department. The
month Of April probably will exceed them
all. The receipts he says, have been
mounting higher and higher for six months.
What some people call the orgy Of
spending has not exhausted itself, said
Mr. Edwards today, but my men. In
their talks with merchants and Others who
pay the great bulk Of the taxes, have been
told that the peak Of extravaganza seems
10 have been reached and that q period of
retrenchment is close at hand.
I'VE hear lot about the income and ex-
cess profits tax which falls due in the
spring of every year and about the hard
ships Of meeting it, but the fact is that the
steadiest tax, and one which is least felt
by the public and of which we hear very
little, Is the luxury lmpost. The poorer
chap who buys his girl an ice-cream soda
doesn't grumble at the penny or two tax
any more than does the rich youth who
presents his tiancee with a diamond tiara
or touring car. Neither misses it as the
item Is SO small as compared with the ex
penditure.
"A kings ransom was spent for candy
last December, but the biggest revenue
came from dealers III iewelry, furs and
automobiles. The theaters showed that III
January they did an unusually prosperous
business. When persons start to econ
omize they usually cut out amusements,
but In January, In the borough of Man
haitian alone, S7S3 sol .43 was paid in
taNes. Multiply that by ten and you will
get some idea of how much Father knick-
erbOckcr and his guests are paying to be
entertained at just the theaters There
are no indications of any panic in these
flcprcs. The man who said: Always be
a bull on the great L. ;. A. seems to be
vindicatcd.
An interesting thing about the luxury
tax Is that more revenue is being derived
from ice cream sodas and other small sales
which carry penny or two of tax than
there Is from the sale Of motor cars,
diamonds and other luxuries Druggists
paid large sum on expensive perfumes
anu NOSl1lctItS- i4NtIN manufacturer,
producer or importer IS required TO make
such returns as will clearly show each tax
able transaction IN the sale Of certain
goods and these are verified by revenue
officers. Section 904 of the Revenue Act of
1918 provides that on and after MAY l,
1919 the tax OF 10 per cent shall be levied
and collected on luxuries, including many
kinds of expensive articles in daily use
IL the sale OF these articles the dealer acts
IS a collection agent for the government.
Other taxes are paid In the form of stamps
One OF the reasons for the falling OFF in
the receipts of income and excess profits
taxes this year was the deduction which
the taxpayer made for sums which he
paid to the government for luxury, pro-
prletary and other taxes. Here is an illus
tTatlon: Let lis say that man takes his
wife TO the theater twice week. He paws
So each time he goes for two tickets. The
tax on each OF the seats is 30 cents. On
four seats week he pays 81 20 and in one
year, So 40. He IS privileged to deduct
that from his net income before computing
his income tax. The same rule would apply
TO any other tax he may have paid to the
government during the year 4 person.
however, Is required 10 prove that he
actually expended the money for luxuries
II any question Is raised on his return.
There have been comparatively few at
tempts st evasion. In fact, the amount re-
ceIved by this Office in luxury, and other
taxes Is monument to the honesty of the
majority OF the people Of thlssgreat CITY