Evening star., 1932-04-10
TAX HELD THREAT
TO RADIO INDUSTRY
Fight in Senate Expected.
Higher Prices Feared
for Buyers.
BY MARTIN CODEL.

~ FFsETTING the stimulus K
Ia radio sales expected this veal
because of the national elec.
~ tions and the big sporting
events that will be broadcast
radio manufacturers are apprehendine
definite retardation in the market
ability of radios and their component
parts if the S per cent excise tax on
radio and phonograph sales is imposed
by Congress.
It appears more than likely that the
tax, which already has passed the
House and by which the Federal Gov
ernnent expects to derive S11 900 00C
toward balancing the budget, will be
adopted along with those on various
other commodities classed as being
luxury goods, more or less. An effort
will be made by the Radio Manufac-
turers' Association to defeat the radio
tax in the Senate, or at least to secure
reduction.
Buyer to Get Burden.
To Mr.. John @. Public the passage
of a radio excise will mean that radio
sets, tubes and parts will cost him just
that much more. The tax will inev-
itably be passed on to the buyer, for
radio production is not only at its
lowest cost stage, but the depression
effects have been felt severely in the
radio industry 1t is common talk In
radio circles that only two manutac-
turers we're able to show profltS last
wear: at least three reported heavy
losses, and there have been any num-
Der of bankruptcies.
The board of the R. NJ A. was to
meet this week end in Hot Springs
Va, at the call of President ]. Clarke
| Colt of Chicago. to consider ways ano
means of defeating the tax legislation
The induStry's hopes now rest with the
Senate, where the plea Will be made
| that. on the basis of 1881 sales, moi
sll ,OOO. 900 but S7,731, $50 in taxes viii
be realized at per cent. With then
| markets reduced, some manufacturer
believe the figure may be closer te
$4,000, 600.
It is the manufacturers contention
that radios cannot be classified as lux
uries or semi-luxuries. According tf
Bond Geddes, executive secretary OF
the r. M. A.: I'm its widespread serv'
ice to the public as great agency o.
communication, religion, education ane
daily individual and national develop
ment. radio cannot be fairly classified
as a luxury, semi-luxury or non-essen'
tial. It's use Is universal and we op'
pose a special discriminatory tax or
| this great service to the millions o.
the American radio public. The clas'
siflcation Of radio with cosmetics, candy
etc, as q luxury Is absurd"
Recommended by Treasury.
The radio tax was recommended b.
the Treasury and the s11, 100000 figur'
was derived from the latest census o
manufacturers. Last year radio sets
phonoeraph combinations, tubes, bat
| teries and accessories we're retailed II
the amount of about $31o,000,0 900, &C
cording to trade estimates. This Is tn
| lowest retail market for radio sinc'
| 1923, when broadcasting was barely ou
of the inceptive stage. When the mar
ket was at its peak, in 1928. 1923 ant
1880, retail sales aggregated aroun'
| $500, ,00O,0 each year. The only IN
creases shown In 1881 were in eKpor
markets. Exports of radios are not u
be taxed under the pending bill.
If the tax is levied, it will be baset
on manufacturers prices, rather thai
retail prices, and will be collected ini
TALLY from the manufacturers The,
will pass it on to the jobbers, who vii
pass it on to the dealers and thence Il
! the public. 1t is possible that SOM
part Of 1t will be absorbed by curtaile,
profits to the middlemen, but this
| improbable In view of the low uni
! costs and narrow profit margins tina
have prevailed since the introduction o
the Iow-priced midget sets and the re
cent cuts In tube prices. The tax
scheduled to go into effect is day
after the bill is signed by the Presi
dent