Evening star., 1933-05-20
Ts Sales Tax to Be Rejected!

Is sales lax W DC 0eJee'S~'
Notwithstanding the recommenoa-
hons of representatives of both laoor
and capital, the members OF the House
Ways and Means Committee are re-
ported to be ready to ditch the manu-
facturers' sales tax as a means OF rals-
ing the 1920, 100000 additional revenue
needed to finance the administrations
public works program and to levy IN
stead large increases in the normal
income tax rates, taxes on stock dlVi-
dends and an increase in the gasoline
tax. This seems a particularly unwise
thing to do. 1t seems all the more
unwise since it is apparent that unless
the continued def1ation which has been
going on in this country for more than
three wears comes to an end there is
likely to be no early recovery, 1t is
proposed by the members of the House
Ways and Means Committee to take
from the salaries and wages OF the
people and from those who have COM
paratively small fixed incomes an esti-
mated additional 5000, 900 through
increasing the normal income tax rates
from 4 to per cent on the first $4,000
of taxable income or any part of it, and
from to 10 per cent on the next $4,000.
Stock dividends, which are not subject
to the personal income tax laws now
because they are taxed at the source
and should not be doubly taxed, are
to be levied against.
The burden of this taxation will fall
upon the great middle class and upon
those who receive small compensation.
It will still further restrict their buy
ing power, already greatly curtailed. 1t
will accomplish this result at a time
when everything is being done to in
crease the prices Of commodities. Where
is the magician who can bring about
greater production Of goods under such
circumstances? The suggestion Is ad-
vanced that the expenditure by the
Government Of So, 800, 900, 900 In pub
lie works program is the answer. But
when the Government has drained dry
the resources of the people and has
expended them in non-productive pub
lie works, what then? The chances are
that both the Government and the peo-
pie will be hard hit.
Repeatedly the suggestion has come
from administration sources that the
public works program will be advanced
only when, as and If the need Is evi-
denced; that the money will be raised
to finance the actual operation OF the
program only as 1t is needed; that the
currency inflationary powers granted
the President will be used only as the
need arises. But when an income tax
is levied upon the people it is levied;
there is no when, as and II about it.
The hope is held out that recovery in
business during the rest OF the year or
the repeal of the eighteenth amend
ment and the Volstead act, or both, may
make it possible not to 60 forward with
the increases in taxation now proposed
to finance the public works program.
II the administration and the Congress
continue to burden the people with
added income taxes, and further handi-
cap them with drastic cuts in Govern
ment salaries and wages and the eliml-
nation of thousands from Government
Jobs they have held, the chance Of any
permanent improvement in business is
not great.
The income tax as a means Of rails
ing revenue has proved distinct fail
ure in hard times and days when in
comes are on the decline. 1t Is esti-
mated that the national income Shrank
in 1882 below the income Of 1929 by
So per cent; that it dropped from
about $s5, ,000, 900, 600 in 1929 to $40,-
900 ,000,o00 in 1882. The per capita
income of the people in 1929 was s701;
in 1882 it was 1920, according to the
estimates. How can the Ways and
Means Committee of the House give tbs
country any assurance that increases
in the rates Of the income taxes will
Yield the Government the needed $220,-
900 900 revenue under such circum-
stances? The records show that since
the depression began Treasury esti-
mates Of revenue to be derived from
the income taxes have Invariably been
too high. When the normal rates
were increased last year, it was esti-
mated that the income taxes would
produce additional revenue. They have
not They have produced far less.
Blind adherence to q political theory
that a manufacturers sales tax would
be unpopular seems to be back OF the
opposition to that kind of a levy, which
would be reasonably sure OF producing
the required revenue The men and
women of the country Who spend the
snoney would meet the manufacturers
sales tax and those who have the most
to spend would bear the greatest burden
of the tax.
The season for straw hats arrived
without seriously clashing with the de-