The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-12-05
CUBA SEES THE LIGHT.

Cuba, on the first of this month,
began the collection OF a one per cent
Gross sales tax. This applies to all
merchants. manufacturers or persons
engaged in industry, unless especially
excepted by the Law, and to all COM
modities, whether for consumption or
otherwise. The government, it is re-
ported, expects to obtain S12 1000, 900
to SIS, 100000 a year from this source.
The tax is to be based on the exact
value of the article at the time of its
sale, exchange or transfer, whether it
consists of raw material or OF prod
ucts manufactured or partly manu-
factured, whether of national or for
eign origin, and whether the sale, ex-
change or transfer is on a cash or
credit basis
This is the real gross sale tax. and
Cuba, largest island of the West In
dies, pygmy in population and ex-
tent of area compared with its neigh
Dor and guardian, the United States,
has taken a step vastly in advance of
anything ever accomplished in the way
of tax regulation by its big neighbor.
In the United States, with the enor-
nous volume of business which even
now is being done, a gross sales tax
like that just adopted in Cuba would
undoubtedly produce in revenue from
three to five billion dollars per annum,
and would allow all the destructive
taxes against business prosperity to
be repealed.
We again have the opportunity of
learning a valuable lesson from an is
land neighbor, just as we learned the
lesson of the postal savings bank from
Hawaii.
The internal revenue bureau reports
decreased receipts for the year ended
last June of nearly a billion and a
half of dollars, the falling off being
mostly in income and excess profits
taxes. This may be due. in part, to
the reaction in trade of the year pre-
vious, but there is little prospect of
better profits in this year of business
activity, because profits, due Inainly
to the high cost of labor, are largely
diminished or made to disappear alto
gether. Nevertheless, the La Follettes
announce their intention OF increas-
ing taxes against capital as much as
possible, il they can get a majority
vote in the coming year to help them
do It. OF course, the excuse will be
tha% the government must get the rev.
enue in some way, and the easiest
way to get it is thru confiscation OF
capital and SURPRISES earned when the
country was better Off
We have the interest of great debt
to pay, added to the ordinary expenses
of government, and added besides to
the extraordinary and unnecessary ex-
penses which it has not yet been pos
sibIe to wipe out thru budget curtail-
ment. A large amount of.money must
evidently be raised or a treasury def
cit realized The source of revenue
supply is shrinking, The remedy of
the La Follettes, of further confisca-
ton OF capital and earnings, will be
fatal to business prosperity.
If the new congress succeed in put
ting thru legislation which hurts bust
ness further. a slump into harder
times may follow. This neither party
would be apt to want to be respon-
sible for. The politicians would sense
the danger of the public registering
its opposition when the time came.
Members of congress who take up
this tax question in a common-sense
way and try to find out what is the
best method for the whole country
not what one or another class or fac |
ton wants-wiII unquestionably bene- |
fit their own political future. The |
farmer-labor element, II continuing to |
insist on the retention of taxes that
discourage Investments in railways, /
factories and other essential machin- |
cry OF Industry. and in trying to take
away undistributed profits which are
being used an essential working capi- |
tal-win be cutting off its nose to
spite it's face; and will deprive, the /
farmer and the laborer of the very /
source OF his well-being.
Why will not congress take the busi-
ness way OF doing this thing and the
way that will release the fountain of
capital, allowing it to flow into bust
ness enterprise and TO bring sure and
great prosperity? This method is thru
the sales tax, as nearly every business
man who has given the matter atten-
ton knows and believes.