Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-28
BANKERS IN FAVOR
/. OF LUXURY TAXES
Special Sales Impost Be-
Iieved Best Way to Meet
U. S. Deficit.
M VICTOR EUBANK.
Associated Press Financial writer,


NEW YORK. October 2s.--Although
there are divergent opinions among in
dustrtal leaders as to the wisdom Of
imposing . special sales tax ON luxury
articles, IS a means Of partially over
coming the huge governmental deficit
estimated Is between one and two bill
non dollars. many Wall Street finan-
eters are favorable to this means Of
boosting Uncle Sans income.
Bankers generally were much In
terested In the recent news from
washington that the Treasury officials
were seriously considering this sales
tax e . way out of budgetary Diff
nculties. The theory Of the financiers
VINO favor the tax is that it would
place less of a burden on the basic
business OF the country than any other
form OF taxation
It Is understood the proposed tax
might include such articles as auto
mobiles. radio sets, matches. tobacco.
gasoline, etc. It Is realized IN tn,
financial district, however, that there
would be serious opposition from the
automooiie and radio manufacturers,
especially.
Plan Has Worked Elsewhere.
At the same time financiers favoring
the proposition argue that selectiyc
sales taxes would be so small that they
would hardly be felt by the individual
consumer and in most cases could be
absorbed by the manufacturer without
any appreciate loss.
1t is pointed out that such taxes
have been successful IN Canada and the
Philippines, where they have not ap-
parently interfered with the free move-
ment Of products from manufacturer TO
consumer. The bankers believe the
= -.
States with the least harm to the uslh.
prises.
Those who are inclined 70 view tha
sales tax IS the least Of various evils
compare the Governments sources OF
income for the first quarter Of the pres
ent fiscal year TO show how little excise
saAes nave anected the purchases OF
so-called luxury products.
From July ! to September 80 the
total internal revenue was SASS, IA, 328,
comparable with sos, 800, TOT for the
same period O year ago, or q reduction
or e263,21s,3T9. In the same quarter
miscellaneous taxes, which include ex-
else taxes on tobacco, playing cards,
etc, totaled $141, $50, or a reduce
ton 81 only $l2 ,969, 326 from the corre-
spending quarter Of last year.
These figures, according to some
financial experts, indicate that small
taxes on luxury commodities interfere
but little with the demand of con-
sumers, while at the same time fur.
nishing large percentage of the reye-
nues needed by the Government.
Tobacco Taxes.
While there is already a heavy tag
on tobacco products, Treasury authors
ties are said to believe there would not
De any great objection by the public to
the payment of q slightly increased
price for cigarettes and cigars. in the
event that the additional tax was not
ABSORBED by the manufacturers.
England. by the way, which is also
commented by big deficit, recently In
creased the beer and tobacco taxes.
1ne brewers and manufacturers imme-
diately announced they would them-
selves assume these taxes, at least for
the moment At the same time beer
mugs IN the pubs" were made it1st a
tr11e smaller, so that the consumer got
just little less beer for the same price
ne nad been paying. Also it was under-
STOOD that not quite so much tobacco
would be put In cigarettes and cigars.
mat the English pay for their smokes
Is shown by the fact that in ENGLAND
package Of 90 ordinary cigarettes re-
tails for shilling, or approximately rs
cents.
The matter of . sales tax in the
United states, however, is at present
IN somewhat nebulous form. While
the Treasury Is studying this kind Of
revenue carefully, no decision ag "a
SPECIFIC recommendations to CONGRESS
has been reached.