Evening star., 1921-07-14
TAX ON PRODUCTION.
NOW APPEARS SURE
President Wants Best Way to
Relieve Business-Revenue
Stamps Likely.
BY DAVID LAWRENCE.

President Harding has made it clear
to the republican leaders in Congress
that he wants a tax program adopted
which will lift restraint from business
initiative. He is not committed to
sales tax, but is inclined to believe
that a tax on production at the source
can be imposed without adding to the
burden of business.
While the tax program is in en-
bryo condition certain fundamentals
'Nre practically agreed upon. For IN
a. nee. business men everywhere have
hpen IMAGINING that with the repeal
Of the excess profits tax the govern
n1ent would be obliged to increase
materially the corporation taxes. me
aim Of the Harding administration.
however. is to avoid any increase Of
CORPORATION taxes. if possible. and
only to impose a slight addition in
taxes il necessary Inere
is. indeed, no thought OF making the
corporation taxes a substitute for the
excess profit tax.
to the business men of the country
Who have worried over the prospects
of a greatly increased corporation
tax. President Harding. however
feels that the revival of business IN
America is at this time paramount
consideration, and that nothing
should be placed in the way of busi-
ness incentive.
Excess PROFIT Tax to Go.
The repeal of the excess profit tax
Is foregone. conclusion. and 1t IS
certain that the next revenue Dill
u.ilI not attempt to make the busi-
ness and industries of the country
carry the bulk of the load. Instead.
the tax burden will be more evenly
distributed by the use of every sort
of stamp tax.
The three-cent letter postage may
come back, and it seems assured that
revenue stamps will be necessary on
practically every kind of business
transactions from bank checks and
drafts to real estate papers and
other documents OF purchase ana
sale. While these small taxes may
prove annoying and inconvenient. the
feeling is that such annoyance is
hardly to be compared with the bur-
den hitherto carried by business as a
whole. Taxes at best are disagree
able. but the government Jop thiS
time is to distribute them in sucF
fashion as to stimulate a business
revival.
a substitute for the sales tax, be-
cause it will not be so difficult to col.
lect and will not be paid several
times as goods pass from producer 10
consumer The exact form OF TINS
production tax has not yet been de-
termined. but the idea appears to be
to impose the tax on the output OF
commodities very much as the present
tax on automobiles is covered.
Will Pass on Payment.
In such cases, of course, the manu-
facturer will pass on the payment OF
the tax to the consumer, as happens
with automobiles, but in the sales
tax proposal the chances were that
more than one tax would be imposed
on the same article as it passed to
various stages.
The progress of the tax program
is expected to be more rapid after
the House finishes with the perma-
nent tariff bill. Indeed. it is the ad-
ministration's plan to have the SEN
ate sidetrack the tariff bill when 1t
gets to the Senate, by having lengthy
committee hearings. The revenue bill
agreed upon by republican leaders
will also be introduced in the Sem
ate and referred to committee while
it is being discussed in the House.
1t will mean that the tax bill will
come out of the Senate finance COM
mittee ahead of the tariff, and prob
ably will be passed before the tariff
bill is debated. The hope now is that
both the tax and the tariff bills will
be out of the way by October 1.
(Conyri9ht 1921