The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-24

Pile? Last year it was $40 600, 00O, 900
S., 500 900 900 by all taxing units. A
be collected in taxes to pay for IL
subtract from the purchasing powe
Those who receive the taxes will
spend them. Those who pay the
taxes will have that much less to
spend. These high taxes will take
more than half of the nations
money income-$28, 500, 900 900 out of
$40 900 900 ,000-leaving only 500
500 900 900 for those who produce the
wealth.
The tax, as already explained,
will be transactions tax, not a re-
tail sales tax. The difference is
enormous.
I buy a suit for $50 and pay tax
of 2 per cent. I sell it to you for
$40 and you pay 2 per cent. The
retail price of the suit is $40. But
the two transactions total $40. OF
course pass the 2 per cent I pay
on to you. You pay that plus the 2
per cent you pay when you buy the
suit. You really pay more than 2
per cent.
Process is Involved
1t is of course far worse than
that. Because the taxes start with
the wool on the sheep. The ship
per buys from the farmer and pays
2 per cent. The yarn maker buys
from the shipper. The fabric maker
buys from the yarn maker. The
suit manufacturer buys from the
cloth maker and so on. And there
is 2 per cent tax on each trans
action.
The total of the transactions on
$40 suit may be $3.50. All these
taxes are paid by the final Gus
toner to the retailer. The buyer
of $40 suit might we'll pay 2 per
cent on $3.50 and not per cent on
$40.
Most of the taxes in the end
would be paid by customers at
retail. And this means the great
bulk would be paid by the wage
earners of the nation. You could
not pile SIG, 200, 900 900 onto the price
of goods without impoverishing the
workers of the nation. OF course,
the pensioners would have the
money to spend which had been
taken from the workers.
But it must be clear that the
workers not the producers -
must have the money before it
can be taken from the pensioners.
And if you impoverish them the
whole economic system will collapse
the pensions scheme along with
it.
Five Vital Elements
DR.. Townsends plan includes two
essential elements. One is that the
aged get 5000 a month each. The
other is that they spend it within
the month. If they take ST, 500 ,000,-
600 a month from those who earn
and pay the taxes and fail to spend
it all, effective purchasing power
will be reduced to the extent that
they hoard the money.
DR.. Townsend recognizes this. He
therefore is trying to work out a
plan to compel the pensioners &C
tually to spend their money.
The pensioner will not be given
cash. Instead, an account will be
opened for him in a local bank
selected by the government. The
check will be sent to the bank and
an account opened for him for 5000
This he can get only by making
checks in payment of his purchases.
The bank will not credit him with
his next months check unless the
5000 of the preceding month is all
drawn against.
However, if the old gentleman
waits to save, what will prevent him
from making a check to his grocer
for SO to cover a So purchase and
getting the change in cash?
Would Not Aid Society
AS matter of fact you have to
recognize his need for cash. He
can't give checks for street car fare,
movie seats, cigar, cup of cof-
fee in restaurant, etc. He must
have some cash.
And you cannot check up on his
purchases to see if he elaborated
with his dealer to get some cash on
a check. 1t would take an army of
shoppers and sleuths ten times as
big as the prohibition army.
There can be little doubt that the
plan would not aid the economic
society. That being so it would
not help the aged, for since the
money must come out of the pro-
ducing element of society, and since
the producing element cannot pay
it out of its present purchasing
power and since the plan will not
increase purchasing power, it would
break down altogether.
The aged as we'll as the young
sters would all be victims of a
scheme. conceived in good faith, by
well meaning people, but people
who do not know how this myster-
ious machine works.