Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-03-21
A TAX THAT EVERY ONE
WOULD HAVE TO PAY
Retail or WIN olesaIe, Would Distribute
the Burden on All Consumers

IN SPITE Of the difficulties in the way
L of its application, sentiment among lead.
Crs in Congress is turning toward the i'm
position of some kind Of sales tax.
They have become convinced that the
excess profits tax and some Of the higher
surfaces on incomes arc so burdensomc and
destructive that revenue must be raised in
Il different way.
Tho extremely high taxes on largo profits
and big incomes were levied the theory
that the rich could be made to pay. But
these taxes have brought hardship 10 the
very groups of society which they were in
tended to protect. They have diverted from
the expansion of business into the public
treasury large sums which ordinarily would
have been used to supply new capital for
industry. And in many instances the money
has come, not from the men who pay it in
the first place, but from the ultimate con.
sumers. These taxes have been responsible
in a large measure for the prevailing high
prices Of recent years. Other causes have
affected prices, it is true, but the money
taken by the government in an unwise and
unscientifc plan Of taxation has been
Strangling business and destroying the very
sources from which future taxes can b.
collected.
Two kinds of a sales tax are proposed.
One is known as u turnover tax; that is
tax on the gross sale Of every business in
the country, wholesale or retail. 1t is esti-
mated that such tax would weld $1,000.
O0O. 600 Il year if il were levied at the rate
Of | per cent.
Those who object to the turnover tax say.
and with some degree Of truth. that as it
would hc cumulative. being added to the
price of an article every time il changed
hands between the time it left the manufac-
turcr till II reached the ultimate consumer.
it would become burdenSOmp For example.
it is said that n turnover tax of per cent
a pair Of shoes selling for 81 would add
fifteen cents 70 the cost OF the shoes. as a
tax would be paid first by the mHnufaC
turer second by the iobber and third by the
final purchaser But this leaves out of
account the business custom of adding n
certain per cent for profit 10 every item
that enters into the cost of commodity.
The manufacturer who had to pay five cents
tax on a pair of shoes would probably add
seven cents to the price, the jobber would
make that seven cents still more, say ten
cents at minimum. and the retailer would
add twenty or twenty hve cents 70 his price.
The government would get its fifteen cents,
but tho ultmat" consumer would have to
pay twenty or twenty. five cents.
The advocates Of the second kind Of
rhcse objections. They would have the tax
levied only on the final sale. Thus. tho
per cent tax on a pair of shoes worth 81
would be only five cents and only ten cents
on n $40 pair of shoes. They argue thar it
could be levied and collected just uS easily
as the tax on medicines and certain toilet
articles is nov levied and collected by the
drug stores, The merchant buys supply
Of revenue stamps md attaches them to the
ipln ,tha .nlI p,l nn1ln tIn
from the purchaser. II has been estimated
that such tax would produce an annual
revenue of s. 600 600 900. or about one half
the amount needed by the government,
\ moments consideration will show to
any one familiar with business methods that
there would BE- many difficulties in tho way
"f working out an equitable aspiration Of
SUch IA tax Whether they are regarded a.
inSurmountable will depend in large measure
on whether the person raising the objections
wishes 70 ind way out or i UnaltcrAbly
opposed to any kind of Il sales tax.
What for example should b. III" tan on
q package of biscuits now selling IN IN"
grocery stores for eight cents: How IS the
sale Of newspapers and magazines to he
taxed? Is It rxpcdicnt 10 exempt from tho
ia& the sale Of all articles the retail price
or which is less than 81 or is tnc tax 70 bo
made at on" time regardless Of che price Of
oach article? Arc total sales Of less than 81
to he exempted: And il so. what j. 10 hc
don" to prevent the thrifty from going into
store and buying ninety five cent, worth
of goods. paving for them and going ont
ut the door and coming right back again and
buying ninety nv" cents worth more. and
repeating the operation us long H> he
plpaseSE This way Of beating tho 'nV was
rpn ,.,,1
quarts Of beer in a saloon when the sHloun
keeper was allowed to sell only QUO quart
to Il customer. Two men would 60 m with
a pitcher and each would buy quart. or
rnc Same man would 60 in and buv "A quart
Then he would 90 outside Of the door and
come right back again and buy his second
quart and repeat tn" process iii, he got ali
he wanted.
But no one thinks that n Nales.ta law can
be- framed which cannot BE- cvadcd in some
way Ways have been found to rvadc tho
! income tax law and tho law taxing excess
! profits But considerable revenue has been
raised BY these taxes.
! The saIo, tax j, admlttpdIv oxpcr,mcnta.
! in the InuCd States. Because of this
! OTTO H. Kahn. one OF tho snundeSt economic
/ thinkers in tho country. has suggested that
+ il be tr>r"d before being adoptrd ~ one Of
the primary sources Of revenue. III, pro,u-
! >it,On is that gross sales or turnover tax
confined to commodities "Armpriug thu
products Of the farms be l"yi"d at tnr rate
! Of unC-thrd Of ! per rrnt. This. he
! thinks is 50 small that it woIId no, be-
| burd"nsOlnC on any one, Net hr estimates
! thnt it would raise Ar lcas, $500 OOO. 600 a
/ wear. or about the amount produced bv the
! present excess profits tax. II il were found
! 'o work satisfactorlv, then the rate rould
| be- increased and II il did not work out
/ we'll the experiment could be continued in Il
/ different way until plan was found that
would both produce rcvonu" und encourage
| business.
MIR Kahn j. not dogmatir ab0ur II tie
admits that he has some doubts, but when
the nation is confronted with the necessity
Of raising permanent revenues Of yaStcr
| amount than ever before, IL Is necessary to