The Washington herald., 1921-03-16
BY JOHN $. HoRp,

President of the Columbia Credit
Corporation of Washington. ID. c.
Few people in this country have
had the opportunity. so far. to learn
what a sales tax really is. But
when they have once become ac-
quainted with the simplicity of its
operation, its productivity and the
innate fairness of its results to all.
they become its ardent supporters
and remain so.
refer to the type of sales tax
such as that which has been in sue
cessful operation in the Philippine
Islands for the last sixteen years.
I wrote that tax law and as Insular
Collector of Internal Revenue, I ad-
hinistered it for five years. There
fore l should know.
i do not, however, refer to nor
recommend some of the other kinds
of sales tax laws. Such, for In
stance. as the kind that has been
IN unsuccessful operation in this
country for several years with its
long schedules of discriminatory
consumption taxes on wearing ap-
parel. food stuffs. soda fountain
products, etc. This tax has few
friends even under its paternal roof
The Secretary of the Treasury has
asked Congress to repeal 1t because
Its provisions are too complex, be-
cause its payment is easily evaded,
and because its collection is too
costly.
American Law Complex.
Strange as 1t may seem, it is
nevertheless true that Ii is precisely
the complexity and unworkableness
of the sales tax law of this country
which makes 1t so hard for the aver
age American to appreciate the SIM
plicity. practically automatic oper-
alton and fairness of the Philip
pines sales tax law. Some three
months ago the spokesman for the
Secretary of the Treasury was at a
hearing of the Ways and Means
Committee when 1t was proposed to
introduce here a sales tax similar to
that of the Philippines. The Secre-
Iarys spokesman objected, saying:
We are experiencing a perfectly
enormous amount of evasion with
respect to some sales taxes such as
are imposed by Section $50. the soda
fountain drinks and taxes of that
Kind. because we haven't got an
adequate force to check them up and
supervise them"
, Evidently the Secretary's spokes-
man knows a good deal about the
operation OF the sales tax law of
this country but very little about
that of the Philippines. Therefore
he believes that the Philippine sales
tax law Is necessarily built ON as
complex a pattern as is the sales
TAX law of this country.
Most Beneficial. Filipino. Saw.
An unreasoning fear-born of ig-
to possess many.
ana yet there Is so little excuse for
this Ignorance because in the Bu-
reau of Insuiar Affairs Of the We
department. and elsewhere in this
city, official reports are ayaiIa HE
Tor each of the sixteen years that
nave elapsed since the sales tar
law was enacted in the Philippine
Islands Year by year the history
OF the operation of the sales tax
method Of collecting revenue ont
there has been recorded until TODAY
-as the Philippine Government in
formed the Secretary of the Treas
ury some three months ago-the
sales tax has become the most pro-
ductfve. equitable and economical
OF all the items in the Philippine
tax laws.
1t Would seem that, with their
facilities for research, the members
OF Congress could get at the true
facts and would utilize this knovI-
edge in their public utterances
But unfortunately, such is not.
universally. the case. During the
last few weeks of the session of
Congress just closed, three members
Of the Lower House approached the
sales tax proposition. Lack of space
makes IL impossible to give Below
more than the substance of a few
OF their statements. My comment
on each statement is attached:
THAT the wealthiest and the
poorest would pay the same tax.
Comment: The tax Is a percentage
one and is based on the values OF
the. goods purchased, therefore the
rich man, who normally buys more
and dearer goods <than the poor
man, would normally pay more
taxes than the poor man; the tax
Is based directly on each taxpayers
ability and willingness to pay.
THAT fraud would be general
and would penalize the consumer.
Comment: Actual. experience in the
Philippines does not confirm this
theory. Frauds out there were rari-.
ties None guilty of fraud ever
claimed ignorance of the law as an
excuse. because the provisions for