Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1923-04-19
Sales Tax Would Work
Injury to ALI Consumers
Mr.. WORKMAN DECLARES MOST
INJURIOUS FORM OF TAXA
TON is A SALES TAX

from the point OF view OF SOOu udf-
kets is a sales tax, declares Mr.. Nord-
man in statement issued today. Not
withstanding the dangers thatAit con-
ceaIs under an apparently harmless
surface the agitation for sales tax
as keeping up with an undiminishing
force and, far from dying out, it finds
a number of influential advocates who
hold it up as a model for the country
Good markets depend primarily up
on opportunities to produce and abili
ty to buy on the part of the producing
elements of society. Anything that de-
creases the producing eand the pur-
chasing power of these elements tends
to injure the markets for agricultural
and manufactured commodities. Taxa
ton should, therefore, be so levied as
to fall as lightly as possible on the
production and consumption of wealth
A sales tax by falling directly on
consumption and indirectly on produc-
ton tends to discourage production
and 10 decrease consumption. Before
much progress is made in this country
in tax matters the people must under
stand that taxes on either production
or consumption are paid in the end by
the final consumer. The consumer, be-
ing compelled to pay a higher price
for the things he buys, will gradually
decrease consumption. This eurtailed
demand for goods will cause industry
to slacken UP with consequent harm
full influence on the farmers market,
for it should not be forgotten that the
latter depends almost entirely upon
continual employment and high buying
power of the laboring masses in indus
try.
With these considerations in mind
Mr.. Nordman scores the attempts of
certain writer's on economic subjects
who are trying to hold up a sales tax
as a model of taxation. A sales tax
will set people to complaining about
the outrageous prices that are being
charged for merchandise, about the
profiteering middleman and about the
high cost of living. But many of them
will not know that the cause of their
being hard up is the tax they are
paying in disguised form. While,
therefore, under d sales tax there viii
be less complaint about high taxes the.
effect on industry will, nevertheless
be very bad since it would be a deter
rent to the consumption of wealth and
therefore a serious impeachment to the
economic progress of society.
Some advocates of a sales tax claim
that it would be a good thing for the
country to have reduced consumption
but in this they show an utter lack
of understanding of the primary pre-
requisites of economic progress so far
as these concern the production and
the consumption of wealth Wealth
is produced to be consumed. A man
would not be thought to have 7lis
right mind if he produced wealth and
then made no use of it for good and
legitimate purposes whether to satisfy
his own wants or use it for the i'm
provement of his business or invest
ing it in some enterprise that will
stimulate the production of useful
things. There are, on the other hand,
people who spend their money in fu
tile and foolish ways Between these
two extremes, however, the great
mass of people use their earnings to
procure the ordinary necessities and
comforts Of life. Without any question
it is better for both the individual and
society to have money spent wisely
but it must be spent for something,
otherwise it will do the possessor of
it or society in general no good. 1t is
the spending of their money that Gre
ties standards of living for the Ameri-
can people and it is the same spend
ing that makes a market for the goods
and the services of the American
farmer manufacturer merchant and
professional man. Then why place ar
tificial restrictions in the way Of
spending anymore than we do of earn
ing money? 1t is certainly just as un-
wise in the one case as it is N the
other.
1t is Mr. Nordman's opinion that the
arguments used in defending a sales
tax show better than anything else the
confusion that exists in the minds Of
the men who make and administer
our tax laws. This is due to the fact
that the great mass of our politicians
and economists have so far entirely
overlooked the most vital principle in
taxation. This is a principle that
makes distinction between taxes
paid by people who render useful SER
vices for their income and, therefore,
earn what they get and those who get
their incomes in ways that are use
less and even harmful to society and,
therefore, do not earn what they get.
In the first class are included all real
producers of wealth such as farmers
and wage earners, manufacturers,
merchants, professional and working
men The other class includes invest
owe oud cnaou1ot tore in natural rp.