Evening star., 1932-05-18
BY JAMES MONTAGNES.
ARTICLE I.

ARTICLE I.
~ AINIESS taxation is when you
pay a tax without realizing you
are paying 1t. When you puy
i package of cigarettes label on
the package mentions that there
is a Government tax on your smoking.
When you give a check for more than
SIS in Canada YOU have to affiX an ex-
else stamp. When you go to theater,
there is an amusement tax. These ana
other taxes you realize are present Wnen
YOU spend your money. Your contrlpu-
ton to the Treasury is a definite known
sum. 1t may make you Wratnlul OF
benevolent depending on your attitude
to taxation in general. But when you
buy manufactured article In store
in Canada and there is no mention OF
a tax made. neither by sticker stamp or
on your bill, you do not realize that you
are paying sales tax which the re-
taller or wholesaler or manufacturer has
already PAID III cash to the Govern
ment. The extraction of that tax is
invisible. That is probably the reason
why the sales tax has been such big
source of revenue for the Canadian
treasury since 1t inception in 1920.
The Canadian sales tax was inaugu-
rated as an additional means OF revenue
to meet wartime obligations. While
great many taxes were conceived dur
| ing the years OF the World War, they
were not sufficient to meet the ever
growing needs of the Dominion's eX-
penditureS in connection with wartime
activities A tax OH the sales of prac-
tically all manufactured goods was the
result. and for four years the tax was
collected from practically every trans
action involved in the final sale Of one
article. Manufacturer, wholesaler. Job-
Der and retailer all paid the tax, which
grew in size after each step on the way
to the retail store counter. On January
l. 1924 a new system was put INTO
, practice, and 1t Is along that line that
the tax has been collected since.
Collected Only Once.
The sales tax now is collected once,
when the article taxed is completely
manufactured. The various parts which
go to make up the final article are not
taxed separately. They may move
through a dozen hands, from one man
ufacturer to another. Not until the ar
ticle is finally ready for the market is
the governments tax collected on 1t.
The sales tax is manufacturers tax.
The public seldom comes in contact
with it, except when some private IN
dividual buys direct from the factory
or direct from the wholesaler. 1t is
applicable to imports as well as domes-
tic goods. and the exemptions from 1t
are few, including most foodstuffs, agri-
cultural machinery, mining machinery.
some medical equipment, educational
books. On imports it is computed on
the duty paid value. which is the cost
Of the article for customs duty pur-
poses, plus the customs duty paid. For
domestic taxation the sales tax is ap-
piled to the manufacturers or whole
saler's selling price.
This tax, which is not greatly in
favor with manufacturers and little
known to the general public who pay
it, is considered enc OF the best
sources OF revenue by the government
because it is easily collected at little
cost. Monthly returns have to be made
by the manufacturers, wholesalers and
jobbers licensed to collect sales tax from
their customers. These have to be COM
puted by the Iicensee and accompanied
by a check covering the amount. Like
the income tax, this is an easily col
lected tax, since there are heavy penal