The Bismarck tribune., 1931-11-24
A Gas Tax Racket?
Boston Transcript

When, Twelve years ago, the 1rSt
state gas tax of one cent a gallon
was imposed and applied honestly to
imagined that this system, too, would
lend itself to the purposes Of the
racketeer? Yet such apparently is
the fact, with the gasoline tax now
the center and stimulus of q groupl
of fraudulent transactions In which
the states themselves, to certain
extent, are parties. if we are to con-
slider a breach of faith with the pub
lie as a symbol of wrong. From the
modest one cent a gallon, collected
with the cooperation of the compa-
MES and applied to the stated pur-
pose of providing the chief users OF
gasoline with better roads, we now
have taxes running as high as six
and even seven cents, and their pro-
ceeds used to meet other municipal
expenses for which provision should
be made by other means. Worse
than that, in some states a special
gas tax is levied for general revenue;
thus penalizing one class of citizens
for the benefit of another.
Perhaps it is not realized how far
the evil of unrestricted taxation OF
gasoline has gone. A list of no fewer
than eight separate and distinct Of
fenses against decency and fair play
have been listed. These include de-
moralization of the retail gasoline
| markets in many cities; the entrance
into the system OF distributing gaSo-
line of racketeers, criminals who have
been preying upon honest business
in other lines; operation, for the
promise of illegal profit, of carelessly
constructed and badly managed bulk
plants; new source of direct finan-
cial loss to refiners and other sources
of supply through firms which op-
crate only to beat the tax laws; di-
version to other purposes of moneys
collected from motorists who assented
to taxation under an explicit under
standing that the funds were to go
for roads; selling of inferior goods
as a means of evading tax; fraudu-
lent claims for exemption by some
consumers, on whom the tax bears
heavily, and other ills which have
flowed from an originally admirable
system which has been abused.
It is no less true of gasoline taxa
ton than Of any other form of taxa
ton that If 1t is overdone, the in
evitable result will be loss of revenue
evasion and fraud. Bootlegging of
gasoline is as much violation of
law as bootlegging of liquor. It has
been suggested that the oil industry
and the motorists should work to-
gether to secure inclusion in various
state laws of such safeguards as Ii
censing and bonding Of all dealers,
adequate provisions for checking
shipments and sales, more severe
punishment, including imprisonment,
for those found guilty of violations,
and SO on. These are all right in
their way, and should be incorpo-
rated, but the basic trouble Is abuse
of the tax privilege, with which some
states and communities have run
wild. Indeed, it is stated by no less
an authority than the Oil and Gas
Journal that the profits from the
racket have been so attractive that
they have been divided with conniv-
ing officials, with the usual result OF
; widespread corruption, as in the Ii
quor racket" Liquor bootlegging is
national scandal. but more con-
doned in fact, because Of peculiar
conditions. than swindling of the
public through improper use of the
power to impose taxes on gasoline
: consumption ever will be.