Evening star. [volume] (Washington, D.C.) 1854-1972, 1933-01-10
Sales Tax and Farm Bonus.

Most of the curious features embod-
led in the House farmers bonus" bill,
which may be passed this week, are ex-
planned by the undeniable fact that the
condition Of agriculture is so bad that
something must be done. And in addi-
ton the farmers seem to be pretty well
united in their support Of this measure
or something like it. That, in itself, is
truly remarkable.
But the average citizen, who Is neither
farmer, politician, an economist nor
one versed in the theories of govern
mental administration, is perhaps more
puzzled by the sales tax feature Of this
bill than by anything else.
Spokesman in the House for the
farm relief, or domestic allotment plan,
or farmers bonus" or whatever one
chooses to call the present measure,
have said that the retail prices of prod
ucts "need not be greatly advanced by
the imposition of adjustment charges"
and that the maximum tax levied on
wheat, for instance, would not increase
the price Of pound loaf Of bread by
as much as a penny. 1.-THE various
adjustment charges will undoubtedly
cost the consumer money, but this
money will be promptly spent by the
farmer In ways which will decrease
unemployment and add to the profits
of business" There are others who
dispute the fact that the tax will not
measurably affect the consumers prices,
and one of the obvious flaws IN the
bill is the fact that consumers may
turn to substitutes and by refusing to
buy cut still lower the prices of the
basic commodities on which the bill
plans to pay the farmer bonus.
But the fundamental objective Of the
bill, the very principle upon which it
is based, is to spread an amount which
has been estimated from $500, 100000
to $1,000 ,000,00 among the farmers by
the imposition of a sales tax collected
from the professors and passed on to
the consumer. who must pay it.
When the Ways and Means Commit
tee Of the House last Winter reported
a revenue bill imposing a manufactur-
ers' sales tax of two and quarter per
cent, with exemptions for farmers,
staple food products and small manu-
facturers, it was argued that the higher
cost of commodities thus affected would
be so slight that nobody would be hurt
The total revenue to be produced by
This sales tax-exempting what might be
called the basic needs of life-was esti-
mated at $685., 0oo, 600 in the fiscal year
1898. your committee" said the re-
pert on the bill, submits that there
is no other source of revenue which
will yield the amount imperatively re-
quired with as little protest, as little an
noyance and as little disturbance to
business as a manufacturers sales tax"
Yet few, If any, measures ever brought
into the House have resulted In such
imprisoned defense Of the poor man"
as did this sales tax. 1t was un-Amer-
lean. 1t was everything that was evil.
There was no good in it. 1t was
uproariously defeated. An effort was
made in the Senate to reinsert the sales
tax in the revenue bill by lowering the
rate to one and three quarters per cent
while extending the list Of exemptions
al Nd oil ninthinp-
except expensive wearing apparel
workers tools, agricultural implements.
medicine, etc. This new sales tax, it
was estimated, would produce 1895 ,ooo,-
900. But the Senate turned it down.
The poor man" was saved.
A few days ago new move in the
House for a sales tax to balance the
Federal budget was nipped in the bud
when it was learned that the President
elect was mortified by such an idea
Yet the President-elect is reported as
generally favoring the House farm bill
at least its basic principle, which Is
the principle of specialized and high
sales tax on basic agricultural COM
modities, affecting the price of food and
clothing.
The only difference between the two
sales tax plans is that one would raise
possibly half a billion dollars as Fed
eral revenue to balance the budget
while the other would raise possibly 6
billion dollars as a bonus to the farm
ers. How the same House of Repre-
sentatives can oppose one and shout
for the other is merely one of those
little things in life beyond the ken o.