Evening star., 1933-10-22
Figure Would Be Offset, How.
ever, by $227, 900, 900 Un.
der Prohibition Law.
DOMESTIC LIQUOR RATE
$3.50 TO SO A GALLON
Administration Program Being
Drafted Requires Further Study
of Import Phase.
copyright by the Associated Press. 1933)


With an eye toward repeal that off,
cials believe imminent, the administra-
tion is drafting its tax program in the
expectation Of receiving minimum OF
$500 1000, 900 In taxes from distilled
liquors during the first year Of legal
sale.
This gross income, however, would be
offset by an automatic reduction OF
1927 900 900 now collected through spe-
cial taxes that would end with prohibi-
ton.
To raise the amount the program
calls for would require a tax on do
mestic liquor ranging between $3.50 and
50 a gallon. The domestic tax now
stands at $1l0 a gallon.
Representative Hill Of Washington
chairman of the House Ways and Means
Subcommittee, which begins q study
Monday of revenue legislation. said yes
terday that a tax Of $3.50 a gallon ap-
peared to be about as high as the COM
mittee could 60 with safety to prevent
bootleggers and rum runners from un-
derselling.
Import Tax Problem. =.
The import tax, now fixed at S. q
gallon, plus the domestic tax OF 81 10
is to be the subject of considerable
further study and Will be finally hxeo
on the basis Of evidence to be presented
In the full Ways and Means Commit
tees sessions after December 1. In OF,
fetal quarters. however, 1t was believed
the import tax probably would De re-
duced. rather than raised.
In working out the tax program. the
administration estimated that the con-
sumption Of distilled liquors in the hrst
year after repeal would be approx
mately l50000,0o0 gallons. The con-
sumption in the last year before prom.
bition was approximately 165 5.OOo,oot
gallons.
There is available now In domestic
LIQUOR approximately $4,000 900 gallon:
which these officials estimated would bt
converted to produce approximately
100 900 900 gallons, thus necessitatine
of about so 900 900 to meet the demand
they anticipated.
The import tax was regarded as the
hardest problem the committee would
have to solve. To prevent flood OF
imported liquors Of establAhed and
world advertised brands from coming
in and pre-empting the market, the
Government has refused to grant any
more permits for imports. Omcials dc
not expect that ban to be raised until
the situation is canvaSsed to determine
how much liquor domestic sources car
supply.
Two-fold Policy Decided.
A two-fold policy has been decided
upon to govern f1xation OF the import
tax. This calls for tax high enough
to protect the American distillers who
cannot release liquor for four years
after it has been made.
With this in mind, administration
officials are contemplating an import
duty that would be high enough to al
low domestic distillers an opportunity
to build up their stocks and Their
brands, and yet low enough to prohibi,
profiteering.
The policy calls fdf close watch tc
determine If prices are being raised tt
an amount just short of the tariff or
imported liquor and thus bringing ex-
cessive profits. If so, under the plans
the import duty probably would be
lowered as a matter of policy, to pre-
vent the running of tax-free contra
band liquor from other countries.
What the final import figure will be
was said, therefore, to depend largely
upon the policy of the distillers with
the Government in position to use the
import duty to keep domestic prices al
level to defeat the bootlegger.
Formerly $3.50 a Gallon.
The import tax at the time prohi-
bition went into effect was $3.50 a gal.
Ion. The IS import tax was levied
during prohibition days on importa-
tions for medicinal purposes.
In recent months much foreign
liquor has been shipped in bond under
Government permits to be released il
repeal comes.
Consumption fiuctuated in the year.
before prohibition became effective. Ir
1918 it was 145,000000 gallons. in 1911!
it was 139, 9,000. 900, in 1918. 125, ZOO. 900
1916, 137,e00,00o, and 1917, 165, ,0o0. 900