The labor journal. [volume] (Everett, Wash.) 1909-1976, 1921-05-27
HEARING OF THE
SALES TAX MEN
Big Business Appeals For Sales
Tax and Repeal of Excess
Profits Laws.


bill for a one per cent tax upon sales
! before the Senate Committee on
! Finance, a number of business men
advocated a sales tax and made it
clear that their plan is to shift the
burden of taxes from the big in
comes, large estates and huge cor
poration profits to the workers of
I America.
Mr. Henry G. Opkdycke, vice
| president of the Tax League of
| America, admitted frankly that the
consumer pays this sales tax, and
gave it as his opinion that this tax
would prove the base of the entire
| federal taxation system of the
! United States. He and other wit
nesscs We're vigorously questioned
by members of the committee as to
the fairness of making the public
pay such large proportion of the
taxes when they intimated that two
to three billion dollars a year could
be raised by a sales ak, but they
continued their plea for relief for
industry and business men and the
big fortunes, even urging the re-
duction of surtaXes upon heavy in
comes, flat rate upon incomes and
the repeal of the excess profits tax,
Mr. Charles f. Lord, a textile
manufacturer of New York, assert
ed that by the sales tax the tax
would be spread thin and handicap
nobody. He advocated levying upon
each and every business involving
the sale of any commodity or mer-
chandise produced, manufactured,
or purchased by the vendor for sale,
one per cent tax of the gross
sales to yield 81 800, 100000 a year.
Senator Smoot stated that he
advocated the reduction of higher
tax rates on large incomes for the
benefit of the treasury, and that if
these tax rates came down every
body would pay them and they would
get money in the Federal Treasury!
Advocates of the sales tax assumed
that business men would not pay
their taxes if they were too high
and would invest in tax exempt
securities instead of retaining their
earnings in their business or even
continuing their business. A verbal
bomb was thrown into the hearing
when a representative of Mr.. Fay
cite r. Plumb, president of hard
ware store in Philadelphia who last
summer was an advocate of the
sales tax, stated that thorough
study of the question had con-
WINGED him that the sales tax is so
thoroughly inequitable and would
not yield the revenue that is anti
| cipated. Also that it would place
heavy burden upon the consumers
which they could not meet, and
| ln4 h., e+,, Of ho
question are now strongly opposed
to the sales tax.
Up to date, however, chiefly adj
vocates of the sales tax and of the
repeal of tax upon excess profits
have been heard and they have
been representatives very largely
of big combinations of business in
Guiding the National Association of
Manufacturers of the United States,
the Massachusetts Retail Merchants
Association, Boston Chamber of
Commerce, National Automobile
Chamber of Commerce., etc.
Fortunately for the American
people the issue has been made
very clear at these hearings. Dur
ing the war the principle of pro-
gressive taxation of large incomes
and of big corporation profits was
established. The principle of taxa
ton of estates also was recognized
although the tax rate was so low
as to yield little revenue, only about
100000 a year.
The big businss interests and
monopoles and great corporations
resent, however, the establishment
of the principle that people should
pay for the support of the gov
eminent in proportion to their abil
ity to pay, or in proportion to the
services they have received from
the government. They want to abol-
ish the whole system of taxation
of privilege and to change our tax
system so that the people who, have
very small incomes will pay the
largest part of the costs of the
government from year to year.
Their plan also is to refund the ma
tional debt for forty to sixty years
and to compel the workers of this
country to pay that debt through
consumption taxes.
Mr. Felix VOrenberg, representing
the Massachusetts Retail Associa-
ton, said to the committee: "The
only argument that is usually put
forward by demagogues principally,
is that it merely means a shifting
of the tax, when talking of the
sales tax, from the rich man to the
poor man. Mr.. Vorenberg admit
ted that he did not think it is a
good thing to raise all of the rev.
enue by sales tax now, but his
testimony and that of other advo-
Gates of the sales tax shows what
their ultimate plan is, to relieve
the wealthy and privileged of taxes
and to let the workers and primary
producers foot the bills.
The committee adjourned hear
ings until May goth (last Friday
when Mr. W. M. Clark, vice-presi-
dent of the Order of Railway Con-
ductors, representing the transpor-
tation group of railway employees,
and Benjamin c. Marsh, represent
ing the Farmers National Council,
and the Peoples Reconstruction
League, will appear to oppose the
sales tax and to ask that taxes
upon the excess profits of corpora
tions and upon big incomes be re-
tanned, and large estates taxed very
heavily.