The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-08
HOOVER PLAN
HELD REVIVAL
OF SALES TAX
System Is Fundamentally
the Same as One Put
to Rout.
BEER MAY DECIDE ISSUE
Fate of Proposal Made by
President Depends on
Brew Verdict.
BY MARSHALL MNEIL
Times stan Writer

WASHINGTON, Dec. S.-The new
federal revenue system advocated
by President Hoover and detailed in
his budget message Wednesday is
fundamentally the same as the sales
tax defeated overwhelmingly by The
house and senate seven months ago.
1t would levy a tax of "a ner
cent on all manufactures, except
food and perhaps some grades of
clothing; and although this tax
would be paid directly by the manu-
facturer, it would be paid eventu-
ally by the consumer.
Fate of the Hoover proposal. am
phfied by Treasury Secretary Mills
annual report, made public stimuli
taneously, apparently depends up
on what congress does about taxing
beer. If the Volstead act is modified
and as much as $3.50, 600. 900 or
$5OO,OO0,000 can be raised from q
tax on the beer and wine thus le-
gallzed, the remainder of the deficit
might be made up through borrow
ngs and drastic economies.
Against Added Tax
Representative Henry Rainev ~
Illinois, Democratic floor leader
said today that Hoover now advo-
Gates a general manufacturers
sales tax, although he gives it an
other name and calls it sneciaI
manufacturers excise tax. It is too
oae that the Presidents suggestions
came too late.
1T was safer to make them after
the election than before. Just at
the present time, the country is not
IN the MOOD to consider favorably
any kind Of additional tax"
representative La Guardia (Ren
N. " has declared he will fight the
sales tax again, but the attitude of
representative Doughton Dem. N.
@ is in doubt. These two led the
antl-Sales tax bloc last session.
In the senate, the alignment is
problematical, depending upon
whether President-E Elect Roosevelt
speaks his attitude on the Hoover
program.
Might Favor Limited Levy
Some progressives in both houses
might favor a limited sales tax as
a last resort to balance the budget
and provide money for relief. but
under it food and food containers
and ~wrappings, clothing, farm sup
plies, medicines and the like would
have to be exempt.
Their opposition heretofore has
been based on the fundamental that
inclusion of a tax On consumntion
in our revenue system is a complete
violation of the United States prin-
ciple that taxes must be levied on
ability to pay.
Hoover's budget Mosaic suggest
ed two ways Of getting more reye-
nue.:
First, re-imposition of the federal
l-cent gasoline tax for another year.
beginning July l, 1888. to raise
$137, 600, 900.
Second, extension of the manu.
f%acturers' excise taxes now imposed
to include al manufactures .ex-
cept food, the levy to be "a per
cent, estimated to yield 1855, 600. 900.
This would supplant, in part, the
nuisance taxes imposed last session
in lieu of the general manufac-
turerS' tax.
Mills More Detailed
The $492, 1000, 900 thus raised would
more than meet the 1884 treasury
operating deficit estimated bv
Hoover at slightly more than s3O7.-
100000, but would not meet the
paper" deficit-that is, the deficit
including debt retirement charges.
However, improved business condi-
tons might increase the yield of
other taxes to accomplish this end.
Secretary Mills recommendations
on a sales tax were more detailed.
Mills recommendation does not
specify any exemptions. President
Hoover, in his budget message, pro-
posed to exclude food from the
general levy. In his annual message
delivered Tuesday, this was amend
ed to propose exemption of "neces-
sary' food and perhaps some grades
Of clothing.