Milford chronicle., 1920-12-10
CHANGE TAX PLAN--RE-
DUCE HIGH COST OF LIVING

WASHINGTON Especial correspon-
dence)-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 ad-
vocates of that form of revenue as
substitute for the excess profits tax
now in force. The line of reasoning
followed in support of the assertion
/ is shown in an address before the
/ Economic Club of New York by Jules
S. Bache, a prominent business man of
that city. Mr.. Bache declares, among
other things, that the present tax sys-
tenn results in increased prices of
commodities to the extent of nearly
25 per cent, whereas a gross sales
tax would not increase the price of
commodities beyond an average of 2
and 1-2 per cent. AS every one knows,
what are called war taxes" are made
the excuse for increases in prices OF
commodities, the increase being out
of all proportion to the amount of the
tax. Since. however, the amount of tax
paid can not be determined by the
purchaser of a commodity, he can not
demonstrate the injustice of the in
creased price. Under a gross sales tax
the amount of the tax could be def
nitely determined.
Mr.. Bache is one of the original
proponents and most aggressive advo-
Gates of the gross sales or turnover
tax. His plan contemplates that there
shall be charged a tax of 1 per cent
upon the amount of gross sales where
the total for the year aggregates $6.-
900 or more. This plan would exempt
nearly all farmers and all laborers
from direct payment of the tax. but,
as Mr.. Bache points out, they would
all pay the tax indirectly in the pur-
chase of commodities to the price of
which the tax had been added by the
seller.
Answering the most common objec-
tion made to the gross sales plan, Mr..
Bache says:-
1T is claimed that as one per cent
is 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
ufacturer, jObber and retailer, the
aggregate tax in the end would be
large. Those of us who have given
our time and thought to working
out this tax have as yet been un-
able to find an article on which the
tax would aggregate in its last
movement into the hands of the ul-
innate consumer a greater amount
than three and one-fourth per cent.
Compare a greater amount than
three and one-fourth per cent. Com
pare that with the amounts which
the last years of taxation have add
ed to the cost of living under the
excess profits tax"
1t is also asserted that a gross sales |
tax would tend to eliminate middle /
ment and encourage direct dealing by |
the producer with the consumer, thus |
avoiding one of the turnover taxes |
and reducing the cost of distribution /
which is heavier tax on the coun-
try than would be the gross sales tax 4
itself. Among nineteen reasons listed .
by Mr.. Bache in support of his plan 1
ire the following:
1t will restore competition, enter
prise and individual initiative, now
;mothered to death by the pursuit of
he tax gatherer.
1t will encourage business thrift
stopping the waste of high salaries
md eXtravagances which can then no
onger be charged off against taxes.
Its collection is simple and auto
natic for both Government and tax
)ayer.
1t is fair in it's distribution, the one
Who consumes the most and spends
he most pays the most in taxes.
1t has been in successful operation
n the Philippines for years and has
'royed in every way satisfactory.
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