The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-05-15
CONCERNING A SALES TAX.

vestment Review, claims that the
present system Of taxation is respon-
sible for % per cent of the cost of
living. Mr.. Babson also asserts that
sales tax would reduce this cost (the
portion due to taxation) to II per
cent. That is, the portion of the cost
of living which is due to taxation, now
23 per cent would be cut to Is 1-2 per
cent. Mr.. Babsen says:
1.-The plan for tax revision that
will take the shackles off business is
losing ground at Washington. Secre-
tary Melons letter to Chairman Ford
ney leaves no doubt. Political expedi-
ency may doom the sales tax, which,
up to the present has been gaining
favor in congress and with business
men. The same reason answers for
proposed legerdermain with corpora
ton taxes and surtaxes.
1.-THE Excess Profits Tax, counted on
for 100000, 900 this year, is to be re-
pealed, according to promise, but the
same amount is to be derived by a flat
tax on corporations. That is, corpor-
atoms that do not make the current
interest return on capital may be taxed
and even the $4,000 exemption re-
moved. SurtaXes are to be reduced SO
that no individual will pay more than
40 per cent this year and 33 per cent
In 1922, normal tax and surtax COM
bined, as against a possible 70 per cent
now. This because the higher rates
are uncollectible, merely driving cap
ital into tax-exempt forms. But the
loss of revenue is to be made up by
REIMBURSEMENT in the lower schedules.
Business and the investor alike
have much at stake in the present sit
uation. Worldwide liquidation, enforc-
ing the trend to lower money rates,
doubtless Will dominate national influ-
ences. But ill-advised legislation now
can delay and handicap America
against her competitors.
There is no uncertainty as to the
present major Influence on the minds
at Washington. The Farmers Union
and other interests have joined in pro-
nouncement against a consumption
tax They ignore the economic fact
that the present income tax is, in eff
feet. consumption tax. 1t is esti-
mated that allowance for federal taxes
carried into business costs is the basis
for about % per cent of average retail
prices, whereas q turnover tax could
reduce this to not over 1-2 per cent
of retail value. Nor should the point
be missed that the latter figure is all
the the government now really recov-
ers. The rest is dissipated in business
extravaganza, waste, and expense at
tendant upon computation and collec-
ton.
THAT the western farmers should
| oppose anything that will reduce retail
prices is understandable because, so
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.
THAT the sales tax, to quote Chair
man Fordney. is the sanest, the most
economical and most effective means
of collecting government revenue a
majority in congress is convinced. SEN
ator Mccormack, the leading opponent
claims to have twenty only, out of the
fifty-nine republican senators, pledged
against it. Could the sales tax be
brought to vote, it is hardly to be
doubted that sufficient 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 It's heart. and is
in danger of losing it's head, to the
farmers. Their plea is vocal, every
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 IL
logical taxation which is strangling
business. Eelection over the business
man rendered a vote of confidence to
the incoming administration and is
waiting patiently. 1t now appears
that congress is tempted to violate
that confidence-to play politics--to
put over a stuffed elephant tax re-
form in place of the real and neces-
sary relief.
Business men generally, as individ-
uals. are paying too little attention to
what is being done--or not being done
TO further sane taxation. Taxation
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