Evening star., 1932-04-28
FIGHT FOR SALES
TAX TO CONTINUE
Proposal Remains Chief Is
sue in New Revenue Bill
Before Congress.
BY PHELPS ADAMS.

| While there are more than a score of
new and drastic tax proposals which
will be bitterly disputed and contested
in Congress during the next few weeks
the outstanding vital issue of the reve-
nue. bill of 1882 is and will continue to
be the sales tax.
At present there appears to be little
| chance that this tax will be enacted
and yet throughout the balance of the
| fight the sales tax will be used as the
constant standard of measurement by
which the merits and dement's of al!
! other proposed taxes must be Judged
Should Congress ultimately decide to
| include this provision in the bill it
would no longer be necessary to impose
the present long list of special excise
and miscellaneous taxes which are SO
obnoxious to the small specialized
| groups and industries upon which they
fall.
Budget Problem.
The present sales tax proposal was
presented to the House by the Ways
and Means Committee as the most logi-
cal available solution to the problem
which it faced. That problem was,
briefly, as follows:
The budget had to be balanced in
1888. Allowing for the maximum re-
duction in expenditures, ST 900 0OO. 900
in new revenues was necessary for this
purpose. The first step in providing
this new revenue was, of course, to raise
the normal income tax, the surtax, the
corporation tax and the estate tax rates
and to impose a gift tax.
Congress found there was a logical
DpV0nn
these rates. 1t boosted them, therefore.
as lar as possible, but the best available
estimates showed that the added reve-
nue. from this source would be only
Sl72,0O0, 900, leaving 1928, ,O00, 900 to be
found elsewhere.
Broadly speaking, there are only two
general ways in which Congress NAV
raise internal revenue: 1t may tax the
income Of individuals and corporations
as 1t Is received and it may tax outgo
as the money is spent. 1t was imme-
diately obvious. therefore, that since in
come had been taxed to the limit. some
tax would have to be laid upon expen-
dltureS, and such a tax, called by
whatever name you please, is a sales tax.
Congress would have been willing,
probably, to accept the general "a per
cent sales tax as an emergency meas
ure had it been able to find some guar
antee that 1t would always remain as
a supplement only to the income tax
and that, as conditions improved, it
would be repealed before income tax
rates were reduced so that persons in
the lowest brackets would be first to
enjoy the advantages Of renewed pros
perity.
Dilemma in Congress.
Unfortunately, no such guarantee was
available, and when the House Ways
and Means Committee bill was reported
out, chambers Of commerce in various
parts OF the country hailed the sales
tax with great pleasure as the instru-
ment which would ultimately destroy
the income tax.
Thus Congress was given the i'm
preston that it had to choose eventually
between the sales tax and the income
tax and that while for the moment it
might have both. the sales tax once
given a foothold would destroy the
income tax. 1t chose then and there,
renounced the sales tax and turned to
the unpleasant business of finding an
ava liable substitute
(Copyright, 1922