Martinsburg journal. [volume] (Martinsburg, W. Va.) 1920-1977, 1921-06-16
BY r. II. WINDSOR
the Popular Mechanics MAGAZINE

uttuiiltdAi0H DIS much ds II IL Dur
densome. unwise and inequitable
taxation" If business is 10 recover
II is absolutely necessary to repeal
the present absurd exasperatng. I'M
just. and expensive system without
delay. A member of the Finance
Committee OF the House said 10 me:
In my Judgment the present sys-
tenn adds fully 20 per cent to the
selling cost of merchandise. taken
as a whole" At present II costs
/ the Government millions year TO
collect the taX-and it does not get
near all of 1t at that. 1t costs the
taxpayers many more millions for
time, attorneys and experts to make
out the annual reports. Even then
no one knows for several years
whether or not the report is right
from the revenue departments
point of view
1t is needless to go into details
OF the eXasperations of the present
system. Every taxpayer, large and
small alike, is agreed as TO this.
The question then resolves itself
into, What Is better method?"
Several bills have already been in.
trodnced in the present Congress to
substitute a sales tax" This has
aroused the most vitriolic and fran.
tic objection on the part of few
congressman. They have not. so
far offered sound reasons for their
disapproyal. although supported In
in their attitude by some college
professors. and TO some extent by
the Secretary of the Treasury. Per
haps the best explanation of a sales
tax is that written by an eminent
iinancier Jules s. Bache, who sug-
gests the following general plan.
A tax of ] per cent To be paid
monthly on the actual receipts OF
all engaged in business. with an ex-
emption OF all small business col
lecting $4,000 or less, per year. Any
grammar-school boy can make up
the monthly report for the largest
concern; he takes the total amount
collected and II II exceeds $500 he
points off two figures. On a month
ly collection Of $4,000 this would
be 500. II some months exceed
$500 and others fall below, a refund
is made at the end OF the year II
the total 2 months reports do not
exceed $4,000 The monthly pay
ment would prevent the heavy quar-
terly borrowing at banks. now nee
essary to many, and the govern
ment, by reason OF this steady reg
ular flow of money, need not issue
the short-time "certifcates'' as at
present, on which interest has to
be paid. The ! per cent is estimat
ed by careful financiers to- produce
between $4,000 900, 900 and $1,000
100000, probably about $5,000,000.-
900; this. with the tobacco tax OF
100000 900 and the equal amount
now collected from personal in
comes, should produce the enrm-
Gus revenue OF $6,000,000,00O an
nually. With any sort OF economy
this would be more than required
in peace times.
The average increase in the sell
ing cost OF merchandise does not
figure over 81 per cent. from raw
material TO consumer. against the
20 per cent being added at present
to anticipate the excessincome tax
in force. On a $50 article, such az
suit OF clothes. the sales tax
would be 80 cents. Distributed be-
tween wool grower, mill. wholesaler.
and retailer, the suit could still sell
for $50. On the multitude OF small
purchases OF one dollar or less, the
1 per cent is so small. II could not
increase the retail price, yet would
not be burden on the seller. who
would gladly absorb It, as his yearly
tax would be less than at present.
The Illinois Credit Association vot-
ed against a sales tax, on the
ground that many dealers were
now selling at less than cost the
goods bought by them at war prices.
But should a postwar condition,
which is unlikely to occur again for
years. We hope never stand In the
way OF lasting improvement And
anyway, the sales tax could not 90
into operation this year. and read
justments should be pretty we'll ac-
complished within Il months. Ad-
W one TO a business being run at
a loss. which now pays no taxes.
On the other hand, the business OF
the country is run at a profit, and
losing business cannot last very
long n any event The payment
OF $4,000 on annual receipts OF
1000 900 would make very little
difference, even II that million re-
ceipts showed a loss. 80 tax sys-
tenn can ever be devised which does /
not hit here and there The pres
ent one SENS to hit everywhere |
and il full o. injustice and inequali- |
ties, for which there has been and |
is no relief whatever.
The best test of anything is the
verdict of those who have used it. A !
sales tax Of ! per cent has been in
force in the Philippine Islands for
the past 10 years. For the first few
months it was unpopular, but ever
since it has met with universal APP
proval. Any tax system which is al
lowed TO continue for 5 years in a
country where the taxpayers have
any voice in the matter, must be
pretty good The Filipinos even
have under consideration at the
present time an increase in the rate
to per cent, in substitution for all
other taxes of every kind. 1t may
dent our pride as financiers to boT-
row tax system from our distant
1aOondopts who in t-aorc bova