Evening star., 1932-01-31

Pennsylvania port at night and un-
loading its gasoline and thus escaping
a Scent tax on each Of 10000 gallons
a tidy sum of $500.
The bootlegger does not always buy
his gasoline for export" There is in
this certain risk of detection by the
tax inspectors who in some places
patrol the roads. And so in some
places they buy the gasoline in States
where the tax is low and sell 1t in
States where the tax is high. For
instance, the tax in Missouri is 2
cents. But the State is surrounded by
States with higher rates-IoWa with 3
cents, Illinois with cents, Nebraska
with cents, Kansas with 3, Oklahoma
with S, Kentucky with S, Tennessee
with and Arkansas with 6.
The bootlegger can buy wagonful
OF gasoline in Missouri, pay the 2-cent
tax on it and then cart it unobserVed
into Arkansas, where he sells it to the
retailer without reporting to the State
authorities. Thus he makes cents
on each gallon in taxes. And, of course,
he may pocket it all or split it with
the retailer.
In some States the retailer still pays
the gasoline tax directly to the Gov
eminent. This opens the way for
another neat little racket. Thus
Mr.. X operates a filling station He
gasoline a day. That makes $500 gal
Ions a week. He makes a gross profit
of cents on each gallon, which is
$l05 for the week. From this he
must pay his rent, light. help and take
his losses. At the end Of the week
the best he can do by working about
IA hours a day is $35 clear profit for
himself He is required under the law
to pay quarterly the gasoline taxes
which he collects. And he is allowed
80 days after the end of the quarter
to make a settlement. Now at the end
of the quarter he finds he has sold
As 500 gallons of gasoline, on which
he has collected 4 cents tax per gallon,
or Sl,820. This is due the State gov
ernment. For himself he made S35 a
week, or Sass for the l3 weeks.
Easy Money.
Being human, Mr.. X can hardly
be expected not to sit down in the
quiet hours of the evening beside his
pumps and ponder this fact-that out
of his three months hard work he has
made S455 for himself and $1820
for the Government. 1t doesn't look
fair to him Now, however, he has to
pay the tax. But he won't have to
settle for another eight weeks. In
that time he will make another $3.50
for himself and will collect another
l,120 in taXes-S2 $40 in taxes alto
gether
So, just before the expiration of the
time for making settlement Mr.. x
closes up his gasoline station, disap-
pears from the highway and is heard
Of no more BY doing this he pockets
profit of S3,675 instead of $735; SITS
week instead of s35 week. Then
in few weeks or so Mr.. x appears
under another name as the owner of
a gasoline station upon another high
way.
Now, to end this sort of thing, the
States are abandoning the collection
of taxes from the retailers. Pennsyl-
Vania. for instance, changed over last
year and thus finds she can watch 300
distributors better than she can $4,000
retail stations. But that doesn't end
the racketeering For the distributor
can do the same thing as the retailer
He has learned that he can Just
simply get away with the failure to
pay his taxes.
Unusual Methods.
1t must be remembered that this is
not like ordinary tax-dodging In this
case the taxes are paid by the con-
sumers and the dealers actually collect
them. If they do not pay them
they are just that much ahead in
actual cash. And in the case of
distributors the tax runs into large
figures. In Ohio an oil company COL
lected $39,979 in taxes The tax Of
fetal simply failed to certify this little
item. 1t was found out and now the
Governor is asking the tax officials