Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-09-01
SMooT, TAX SlMPLIFIER

THE ideal tax is one which touches the
i consumer in the fewest possible ways.
The present internal tax law is irritating
because Of the multiplicity Of its imposts.
The child who buys plate Of ice cream has
to pay a tax to the Federal Government.
Every one who travels by railroad is taxed
on the cost of his ticket. II man buys a
drink at a soda fouptain or buys ticket
to n theatre'or a movie show he has to pay
a tax. There nre at least thirty such an
noying taxes in force at present.
1t has been agreed in Washington that
some of them are to be repealed Senator
Smoot has just proposed that they all be
repealed and that the revenues of the Gov
ernment be raised by six taxes, to the cx-
clusion of all others. They are a tax on
incomes, the maximum Of which is not to
exceed 80 per cent; 10 per cent tax on
the net profits of corporations, a tax on to-
bacco. an Inheritance tax, a 3 per cent tax
on manufacturers sales and tax on i'm
ports.
The Senator estimates that these taxes
would yield all the revenue needed All but
the tax on manufacturers sales are included
in some form in the bills now before the
Senate Finance Committee. The tax bill levies
1219 per cent on the profits of corporations,
or pa per cent more than the Utah Senator
proposes. His income tax is substantially
the same as that of the bill, and he pro-
poses no change in the inheritance taxes.
The proposed sales tax is controversial.
Senator SmOot has been urging it for
months. The principle of the tax has re-
Gently been indorsed by the United States
Chdmber Of Commerce after a referendum
to its members. In the form in which the
Senator proposes II the tax would yield an
estimated revenue Of $1,000, 100000. Its
opponents will raise the objection that it Is
practically impossible to decide who are
manufacturers and who are not.
There are many completed articles in the
makeup of which several independent
manufacturers are concerned. Take the au-
tomobile as an example. The magnetic Is
made by one company, the carburetor by
another, the lighting system by another, the
self starter by fourth, the tires by fifth
and, in many cases, the wheels by sixth.
Now, is the automobile manufacturer to
pay per cent tax on the wholesale price of
the car as a completed article. or is he to
deduct from the tax the amount paid by the
manufacturers of the different parts? Or
take u suit Of clothes composed of wooden
cloth, canvas stffening. silk or woo!en or
cotton lining, buttons, thread and waddng.
Is the clothing manufacturer to pay a tax
on the value Of the completed suit or is he
to pay a tax only on tho -A!ue of the work
which he puts into It, plus his profit?
Under one arrangement there would be q
tax Of G per cent on part of the manufac-
tured goods and Of 3 per cent on the re-
mainder.
If Congress is disposed TO levy such a
sales tax as is proposed there are no in
superabe obstacles in the way. 1t is not
impossible to draft the law in such a way
as to prevent double or triple taxation.
The manufacturers will object to it as a
matter of course, but the plain people. who
are irrtated by the grasping fingers of the
tax collector feeling for their pennies when
they make trivial purchases, would be de.
lighted by any plan which would raise the
needed revenue in such a way as to dis
tribute the burden as widely as possible.