The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-01-12
AMAZING TAX
PLAN PROPOSED
BY TOWNSEND
Sales Transaction Levy to
Pay for Pensions, He
Explains Carefully.
bi MAX STERN
Times Special Writer

WASHINGTON. Jan. 2 within
"a few days the House will receive
a bill embodying the Townsend old
age revolving pension plan, Or. F.
z. Townsend said today, and with it
taxation scheme new, strange and
bit beWildeung to Washington
the sales transaction tax.
This tax. explained the lean and
solemn Californian in his cubby-
hole hotel room Office, is misunder-
stood because It's so simple" To
finance "OARPP" and move all per-
sons past so over to Easy-st, the
Federal Government would license
every person or firm that sells things
and impose on every sales transac-
ton a 2 per cent tax
Every seller, whether farmer or
a steel corporation. would be IL
Censed. Every sale, whether an ap-
pie or a locomotive. would bear the
tax And no matter how many times
an article changed hands the tax
would bear down on each transac-
ton pvramidlng as it went.
Wouldn't this require an army
Of tax collectors2" DR.. Townsend
was asked.
THE more the better" he replied.
Don't We want 70 make jObs?"
why . per cent?"
The doctor came back with fig
ures mounting not to billions, but
trlllIOns.
Personal Services Exempt
IF you 60 to the House Ways and
Means Committee hearings for the
Seventy-second Congress" he said,
you'll ind that the U. S. A. did ST.
208.0 100000 600 of business in 1929,
and s1.1O8 600 100000 in 1923. Now
a 2 per cent transaction sales tax on
this business in either year would
raise the required S1.6O0,OO000O
month to pension 100000 old folks
past so at 5000 month. Even in
our worst year, 1892, a 5 per cent
tax would have done it."
Would this tax go on every
transaction. say a taxi fare? A
Yes. Everything but personal serv-
ices
Q-My salary check? A-No. That
is not a sales transaction and if it
were taxed that would involve dou-
, bic taxation when you came to spend
the salary.
GLOW would the tax be collect
ed? Through the poStOffices or
the banks. AT the end, of every
month every Hcensee would total his
gross sales and pay the tax.
FavOrs PenaIizing Buyer
Q-How about evasions? Al ia
vor penaIizing buyer as well as sell
er If we'd done that there wouldn't
have been so much bootlegging I'M
der prohibition. The bill will forbid
trading with an unlicensed seller.
O. Wouldn't this raise the cost of
living tremendously? Ayes, it
probably would add 10 per cent to
prices. But that's what we want, /
isn't it? When prices went up dur
ing and after the war We called it
prosperity.
O. Wouldn't it bring imitation? A
No. I talked with a very eminent
economist, and he said it would
have the opposite effect. 1t would
increase buying and restore compe-
titiOn It would substitute an abun-
dance economy for the one that
calls for taxing us all TO feed the
poor and then blowing under crops
needed to feed them.
Licenses for Half Nation
OF every farmer and small
tradeSman is licensed wouldn't that
require a complicated machinery?
Al expect half the people of the
country would have to take out Ii
CenSeS. But we've worked out more
complicated problems than this
Q-Would the tax apply to in
tangibleS. such as stocks and bonds?
Ayes. to all sales transactions.
The Supreme Court has ruled that
mtangibles are commodities.
Here the interview was interrupt
cd by the entrance of three husky
doctors from Montana and the Da-
kotaS. vanguard of a lobby of IN
determined size. They told of hun
dreds of Townsend clubs in the
snow-blanketed prairies of the
Northwest.
The Presidents social security
plans are all right" said one of
these. Non-PartiSan Lacquer. but
they VIII take too long We want
immediate relief