Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-05-19
THE SALES TAX.

= The farm organisations Of the country have quito
! senerally declared themselves. opposed to the repeal Of
! the excess profits tax and also to the sale tax which has
Dean proposed as a substitute for it. The farmers are
= better Organized for the collective expression of opinion
! than are the citisens Of any other group which even ap-
q proAches them in numbers. They have local associa-
y tons OF one kind or another In which . very consider.
: able Percentage of tho group is included. and these local
: bodies are nearly all represented in one or two great ~
= tonal federated bodies. These bodies are represented
IN Washington by agents whose business it 10 to make
y suggestions to and collect information from the general
: membership. and to present to congressman and to con.
y grass itself the wishes Of those whom they represent.
4 The farm organizations have generally gone on rec
] ora against the sales tax and it il quite likely that the
Il masses of those engaged in other occupations are also
8 opposed to 1t. The basic of most of this opposition to
= the abolition OF the excess profits tax and the substitution
OF the sales tax is that the change would remove tax
! alton from the rich and place it upon the poor. With
/ that belief once created. opposition to the proposed plan
I becomes automatic. And there is enough plausibilty
! IN the theory to make the work Of creating sentiment
quite easy. s
Those who are familiar with the administration of
public affairs are almost = unit in condenniqg the ex-
cess profits tax. 1t is practically certain that this tax
WIZ be repealed. 1t has been demonstrated that it acts
as . drag on the business of the country, and the returns
from it are becoming less each year. There is less unani-
nnity Of opinion among public men on the salee tax.
There may be very valid objections to it. But it il not
Questionable because it passes the tax on the consumer.
Every plan does that. There is no escape from it. The
subject il governed by economic Law, and we cannot
change economic Nav by statute, That tax IL the best
which yields the greatest revenue to the government at
the smallest cost to the consumer. and from this stand
point the sales tax is infinitely to be preferred to the az
cess profits tax.
One Of the most capable economists Of the time.
Roger W. Rabson. has this to say OF the subject in a let
tar just issued:
There is uncertainty as to the present major influ-
ence on the minds at Washington. The Farmers union
and other interests have Joined in pfououncement against
= Consumption tax They ignore the economic fact
that the present income tax is, in effect. = consumption tax.
It is estimated that allowance for federal taxes carried
into business costs is the baGs for about 53& Of average
retail prices, whereas a turnover tax could reduce this
to not over ~ % of retail value. Nor should the point
be missed that the latter figure is Ill that ts govern
nent now really RECEIVERS. The rest is dissipated in bust
ness extravagances, waste. and expense attendant upon
computation and collection. .. =
That the western farmers should oppose anything
10 far, this reduction has put the heaviest Losses on them.
They are misguided in not being informed that the sales
tax is a step to reduce overhead between producer and
consumer, to the benefit Of both. ,'.s- D..
That the sales tax, to quote Chairman Fordney, is
the sanest. the most economical and most effective means
OF collecting government revenue a majority in congress
y convinced. Senator Mccormick the leading opponent,
claims to have twenty only, out of the fifty nine Repub-
lcan senators, pledged against it. Could the sales tax be
brought to a vote. it is hardly to be doubted that sum.
Gent Democratic support would be forthcoming to pass
it. if for no other reason than to make capital for 1922,
out Of the majority party dilemma. ~
Congress has lost its heart, and is in danger OF los
ting its head, to tbs farmers. Their plea is vocal, evary
day, through two highly paid agents at the capitol. The
present congress was elected on a promise to cut the red
tape of government regulation and illogical taxation
which is stranglng business. Election over, tho business
man rendered a vote Of confidence to the incoming ad-
ninistration and is waiting patiently. 1t now appears
that congress is tempted to violate that contidence-to
play politics-to put over a stuffed elephant tax reform
n place OF the real and necessary relief"