The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-10-11
Senator SmOOt Declares His
Plan Eventual Solution.
Does Not Expect Majority for
Bill Right Now.
PRESENT SYSTEM ALL WRONG
Taxes Now Heaped Upon the
Business Man.
Rich Individuals Get Away
With But Small Levy.

Washington, Oct. 1.-THE sales tax,
as a basis for real and lasting revision
and simplification of the present cum
bersome system of taxation imposed
upon the American people by the
world war. was urged upon the senate
today by Senator Reed Smoot, Repub-
lican, of Utah. member of the senate
finance committee.
Senator Smoots plan embodies di-
rect manufacturers and producers tax
of 3 per cent. He proposed it as a
substitute for the pending tax revision
bill and the Republican compromise,
which is to replace it.
Docs Not Expect Majority. 7
Altho he does not anticipate that
vote, Senator Smoot is confident that
not later than next year the sales tax
will be adopted as the keystone of the
American tax system.
The Smoot plan calls for the crea-
ton of six main sources of revenue:
1. Manufacturers and producers sales
tax. 2. Individual income tax. 3. Corr
/ poration tax. 4. Customs duties i'm
posed by the tariff. 5. Inheritance or
estate tax. 6. Tobacco tax.
1t Is Bound to Come.
The sales tax is bound to come. the
senate was told today by Senator
Smoot, Republican, Utah. author of 81
manufacturer sales tax plan which he
urged as Il sub for the excess profits
tax and the various miscellaneous
taxes now in force.
There is no real, fundamental OBJ
lection to sales tax" the senator de-
clared. ''It is a pay as you go propo-
sition, and for that reason favored by
manufacturers, tho they may pay
more in taxes than under an income
and excess profits system. But they
will know to a certainty just what the
"a fG will Of
rent receipts. 1t can be Immediately
charged into costs as definite amount
/ and without the initiation which has
existed under the excess profit tax.
just as rent wages, materials, pur-
chase. interest and all other expenses.
Abolishes ''Returns'' Terror.
"Every one to whom it applied
Iwould be able to ascertain the amount
Eof hts liability at glance and t'se
progress of working out a tax return
would lose all it's terrors. 1t will give
the treasury department a constant
| inflow of revenue during monthly
periods-current expenses can be met
out of current receipts to that extent.
It amounts to an adjusting of taxes to
business instead of trying to compel
| business to adjust itself to taxes"
Replying to arguments that the pro-
posed tax was impossible of admins
! tration, Senator SmoOt said this was
| not fact; that manufacturers taxes
| were being collected under the present
| tax law and that collections could be
made in the same manner under his
| proposals. He gave details of the
manner in which the per cent tax is
| now collected on automobile tires.
tubes. parts and accessories. He also
| read a letter from Assistant Internal
Revenue Commissioner Smith, who
stated that in his opinion the Smoot
manufacturers sales tax would be no
more difficult of administration than
the sales taxes imposed by the 1917
and 1913 laws.
'Under the present law" the
speaker said, "wel have raised during
the fiscal year just passed close to
one billion dollars thru various forms
of sales taxes and special taxes which
have been passed on to the consumer,
of which about two hundred million
dollars has been upon sales by manu-
facturers. In other words we have
collected during the fiscal year just
passed under manufacturers sales
tax an amount of money greater than
was obtained in the year 1915 thru
the income tax on corporations"
Present System All Wrong.
The Utah senator opposed the pro-
posed five per cent increase in the
corporation income and high surtax
rates, declaring that the latter were
keeping revenues from the govern
ment thru the evasion Of taxes by
men of large income.
Division Of property and invest
ment in tax exemption securities" he
continued, have been generally used
as the means of avoiding high taxes.
The greater the wealth, the greater
will be the savings The present law
merely invites persons to determine
their own taxes, the ignorant are
caught but once only. They learn the
method by experience.
"Our present income tax system is
really taxing the individuals who are
actively engaged in business. while It
forces out of taxation the individuals