Evening star., 1932-05-05
The Way Out.

The Senate Finance Committee and
the Sers*c itself may, if they show
statesmanlike qualities. put through a
revenue bill capable of balancing the
budget. The way out of the chaos into
which the whole question Of levying
taxes has tumbled is simple. A return
to the manufacturers sales tax, tax
really capable of raising revenue with
the burden widely and fairly distrib-
uted, would accomplish the desired end.
1t would stop the foolish and sinister
'log rolling" or combinations of votes
in committee and in the Senate, on
this revenue question. g..
When the House Ways and Means
Committee, after months of careful
consideration and hearings, brought out
the revenue bill containing the manu-
facturers' sales tax, supported by Demo-
Gratis and Republicans alike, it appeared
that the problem of raising sufficient
revenue to balance the budget had been
solved But many of the business men
and manufacturers did not yet under
stand that it had become necessary to
raise more than a billion dollars addi-
tional revenue They were opposed to
any form of taxation. The result was
a drive to prevent the adoption of the
manufacturers sales tax. Many manu-
facturers joined in this drive along with
the Progressives, though for obviously
different reasons. 1t was in vain that
the leaders of the House on both sides
of the chamber argued that the manu-
facturers' sales tax provided the fairest
method of raising revenue, since it
applied to all industries except those
producing food stuffs and a few other
necessities of life. Members of the
House, believing that they had heard
the voice of the people and also of the
manufacturing interests of the country,
revolted
And having revolted, the House did
hear from the country. What it heard
was not at all complimentary. In a
panic, the House members fell over
themselves to write into the bill all
kinds of special "sales taxes" which
they called excise taxes to escape the
bad name. In a rush they sent to the
Senate a bill that has reused a vail
of protest from the industries of the
country and at the same time is likely
to fail In raising the needed revenue.
The Senate Finance Committee for
three weeks has tinkered with the bill
1t has voted into the measure and out of
it import taxes" on coal and oil and,
finally, in a hopeless muddle, it voted
these tariff taxes into the bill again
yesterday.
Many of the Senators have become
convinced that the solution of the pres
ent difficulties of the revenue raisers is
the manufacturers sales tax Senator
David A. Reed of Pennsylvania, Re-
publican, is prepared to fight for the SUD-
stitution of that tax for the hodge
podge now in the bill. Senator David
/. Walsh of Massachusetts,, Democrat
is convinced that the sane and states
manlike thing to do is to restore the
manufacturers sales tax to the bill
And from the House membership come
reports that if the Senate will amend
the revenue bill by placing in it again
the manufacturers sales tax, the House
In the end will accept it.
The Bureau of Labor Statistics in its
bulletin on wholesale prices of COM
modities in 1881 shows the great drop
in commodity prices in this country
since 1926. The prices of semi-manu-
facturered articles in this country in
1881 were 684 per cent of what they
were in 1925, ana in December. 1881.
62.2 per cent. The prices of finished
products in 1881 were only 75.4 per cent
of what they were in 1926, and in De-
cember, 1881. II per cent A tax. which
must be widely distributed by the manu-
facturers themselves, on their products
at these low prices viii not materially
raise the cost cf living of the individual
in this country.
The theory Of some members Of Con-
gress that the necessary revenue may
be raised by "soakirg' the rich is
fallacious in times of depression. The
rich have become so much poorer that
the attempt to gain additional revenue
by increasing income tax rates is futile
The Congress itself has finally recog-
nized this to be a fact and has turned
TO special sales taxes on a large number
Of commoditi2s. The general manufac-
dustry. 1t makes no division between
the sheep and the goats And 2 "A per
c.. tax on sales OF manufactured prod
ucts VIII not be an impossible burden.
The revenue must be raised Here is a
Vay out