Evening star., 1921-10-11
|SALES TAX CERTAIN, F.,
SMOOT DECLARES
Tells Senate Advantages Are
in "Pay-as-Y -You-Go"
Benefits.

The salyes tax is bound 10 come, the
Senate was told today by Senator
! Smoot, republican, Utah, author of a
manufacturers sales tax plan, which
he urged as a substitute for the eN-
cess profits tax and the various mis-
cellaneous taxes now in force.
"There is no real fundamental OBJ
lection to the sales tax" the senator
declared. 1T is 'pay-as-you-go'
proposition and for that reason is
favored by manufacturers. though
| they may pay more in taxes than un-
der an income and excess profits sys-
TEN. But they will know to Il GER
! tainty just what the tax is-they
will pay il out of current receipts
1t can be Immediately charged into
tcosts as Il definite amount and with
! out the initiation which has eNlslto
under the excess profits tax, and all
/ taxes are charged into costs, just as
rent. wages, materials purchase, IN
terest and all other expenses
| Would Simplify Tax Returns.
Every one TO whom il applied
would be able to ascertain the
amount of his liability at a glance
| and the process of working out tax
return would lose all its terrors. 1t
will give the Treasury Department q
constant inflow of revenue during
monthly periods-current expenses
can be met out of CURRENT receipts to
! that extent. 1t amounts To an an-
justing of taxes to business instead
| of trying to compel business to adj
just itself TO taxes.
Replying to arguments that the pro-
posed tax was impossible of admins
| "A
! A fact: that manufacturers taxes were
! being collected under the present taA
! law and that collection could be made
| in the same manner under his proposal
| He gave details OF the manner II
which the per cent tax is now col
| lected on automobile tires. tubes, parts
4 and accessories. He also read letter
! from Assistant Int rnal Revenue Com
! missioner Smith. who stated that II
his opinion the Smoot manufacturers
administration than the sales taxes
. imposed by the 1917 and 1913 laws.
j Large Amount Collected.
! "I-nder the present law" the speaker
said. 1--WE have raised during the fisca
year just passed close TO one billior
dollars through various forms Of sale:
| taxes and special taxes which have
been passed on to the consumer, o.
| lars has been upon sales by manufac'
/ turers. In other words. We have col.
lected during the fiscal year just passed
under a manufacturers sales tax al
amount of money greater than was OBJ
4, tanned in the year 1916 through income
, tax on corporations
. The Utah senator opposed the pei
cent increase in the corporation incom.
tax and high surtaX rates. declaring
that the latter were keeping revenues
| from the government through the
| evasion OF taxes by men of large in.
| comes.
! "Division of property and invest.
ment in tax-exempt securities he
continued, have been generally uset
as 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 1earr
| 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 having great wealth"