The daily banner. (Cambridge, Md.) 1897-2008, 1922-05-17
That Sales Tax

There has been ID loi OF talk or
both sides OF this issue, and there
may be Il lot more left 10 say. Some
times it seems as if our Legislators.
give very scant consideration to the
influence some of their legislation
may have on business. All they
seem to take into consideration is the
amount of business that was done liz
the past Then they make plans to
tax that volume of business enough
to produce given amount OF
revenue and consider their problem
solved.
1t is easy to make the figures show
results to fit any given legislators
desire; but the difncuity lies in the
fact that with this additional TAX
there may be nowhere near as much
business, and so the beautiful figures
made in the legislators calculations
do not show up as the result when
applied to actual business.
Suppose our friends the Legislators
had started out to put tax on>farm
implement sales, say at the begin
ming of the year 1921. They might
have computed the amount of sales
for the last decade and levied a tax
accordingly; but they would not have
obtained the desired revenue simply
because there would have been no
busienss to tax.
Suppose a similar tax is applied to
any one of the many lines OF business
where REIMBURSEMENT in prices is TAX
ing place; then it would simply mean
that sales in that line would be prac-
tically stopped, for their burdens are
already as heavy as they can carry.
The direct result would be reduced
sales and higher cost of making
these sales. which naturally Woiuo
mean greater losses than alread" "r'
being absorbed, and, finally, bank
ruptcy must be the result.
Suppose you put three per cent
sales tax on machinery, which is be-
ing sold very largely\on the deferred
payment plan The direct results
will be that if you buy machinery,
for example at $4,000, there will be
Il tax of sos 70 be paid in cash to
the government. Anyone who has
bought or sold machinery knows
that cash is a scarce article, and
! such an addition to the regular cash
payment will prevent hundreds or
even thousands Of sales from being
closed.
Even if such sales were made and
the burden of this tax could be put
into the deferred payments. then IT
would still very seriously affect the
industry because in that case the
banks would be asked to carry the
tax load and supply the ready cash,
simply because the manufacturer
cannot pay wages and other manu-
featuring costs With deferred pay
I, ment notes
If such a tax were imposed on this
class of industries it would cause q
serious slowing up in the lines OF
business which are now slowly re-
viving- without the burden of that
tax. and this would appear to be a
very poor way to attempt to increase
government revenues.
What we need more than anything
, else is less taxation of our industries
and less waste of the revenues pro-
yided We need to economics in
stead of dcgisinG new ways and
means for spending NOR" money.
! which is to be provided by some new,
! special form of taxation
! We must get over the idea that
| because we are a rich nation W" can
! continue to rc"lllessly throw our
money away. without giving serious
| thought to the Inevitable effects. Let
us start to put the brakes on now
The Slug.