Evening star., 1932-05-31

and adding to the hardships Of the
vic inns of the depression, the general
manufacturers excise tax. if it is i'm
| posed, will exclude all food and articles
of clothing except expensive wearing
| apparel Of the rich. Medicines will be
exempted, also working mems tools,
newspapers and periodicals and articles
for religious worship In addition.
have proposed to exempt from the tax
all products of the farm and all agri-
! cultural implements.
1T has been repeatedly shown that
| in the families with incomes of S2.500
or less, their food, clothing and lodging
account for more than 70 per cent Of
their total expenditures. Their other
expenditures are for car fares and
! lunches, recreation, insurance and saw
| ings. doctor bills, dentist bills, papers,
magazines and incidentals. laundry,
church contributions-prac none
Of which are reached by this tax. This
| leaves one item which may be reached
| for taxation. namely. household equip
ment upkeep, and this is estimated to
constitute on the average between 4
/ and per cent Of the family's expense;
/ and on this small item of the family's
! expenditures, hardly more than 500,
We are proposing to levy a tax Of "a
per cent, or SITS, on the wholesale
value of the merchandise. I submit,
/ therefore, that so far as the citizen Of
limited means IS concerned, the burden
/ OF the sales tax which we are p-opos-
ing Is infnitesimal.
Dependent on Expenditures.
In the case Of the prosperous and
the wealthy the contribu ion which
hay-y yI.t1 a tn In LlarfD,
ment through the medium of the
manufacturers excise tax will depend
ON the volume Of their expenditures,
and I submit that there is no fairer
way Of measuring their capacity to pay
! tax than to measure 1t by the
volume Of their purchases, plus the
graduated income tax already levied on
them.
In a word, the manufacturers excise
| tax, because Of the exemptions which 1t
carries. will not increase the cost of
living to the masses. but 1t will tax
the purchases Of the Wellto-do and the
rich
There is one other aspect Of our
tax problem Of high importance which
has figured but little in the current
discussion Of the subject. There are
now outstanding $4,000, ,000,0 900 Of
Federal. State and municipal bonds and
notes which are tax exempt and which
are beyond the reach of any income tax
which Congress may lawfully impose.
In addition to the $4,000, ,0O0, 900 of
wholly tax-exemp. securities there are
$4,000 900 900 OF Government bonds
partially exempt in that the income
therefrom is not subject to the normal
tax. From these tax-exempt securities
flows vast annual volume Of income
which pays practically no tax, a large
part Of which i beyond the reach of
the income ta,; and can be reached
if at all, cnly through the medium of
a tax upon eIpe elditures, which is the
principle O! thc manufacturers excise
tax.
$4,000, 100000 in Dividends.
In addition to this. the owners OF
stoch IN domestic business corporations
received tn f8oo, according to Treasury
! figures, over S4000,000,00O in dividends.
We do not levy the normal income tax
on such dividends because Of the fact
that the corporation has already con-
tributed percentage Of its profits out
Of which dividends are paid. Here Is
another vast sum of money in the pos
session Of the So-called prosperous
classes which we can reach with a
consumption tax levied on the ex-
penditure of this money in trade.
Nearly $4,000 100000 is turned back
annually from the treasures of life
insurance companies to their policy
holders in the form of annuities or
death losses. This money is not tax
| able income. but If spent will help bear
the tax burden.
Time does not permit OF further