The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-02

the big American family is governed
by the acceleration of spending
dollars.
Two-Year Start Required
The average national income of
s64 900, 100000 will be supplemented
by S18,000,000 900 brought about by
seven and one-half million people
spending each 5000 month,
making total of $4,000, 900, 900,
which is almost back to the 1929
income peak"
But, says DR.. White, no revolving
fund is proposed, so before the new
spenders began getting buying pow
err back into circula lion, taxes
would be coming out DR.. Townsend
has admitted that it would prob
ably take two years to enroll all
pensioners. Even if there we're only
a three month waiting period while
the pension reserve was piling up,
the huge sales tax" would so re-
tard business as to dry up many
sources of income, according to DR..
White.
"A per cent tax on every sale or
exchange of property or service is
so heavy" says DR.. White, that it
would completely stop many kinds
of transactions. Any attempt to
collect !, lch tax on stock and bond
transactions would close every stock
exchange in the country and cause
it to move to Canada, since margins
on stocks and bonds are far less
than per cent
Denied by TOwnsendites
This, the Townsendites deny. The
very passage of the act WILL they
assert, give an impetus to buying
so that deflationary forces will be
reversed and wealth increased.
DR.. Witte adds: The Townsend
sales tax plus is such a terrifcally
heavy and burdensome tax that it
is doubtful whether it can be COL
lected at all" The rich will evade,
the poor will pay in increased
prices, and before the three month
waiting period is over we are very
likely to have complete economic
COLLAPSED depression vastly more
serious than that which followed the
stock market crisis in October,
1929"
Admittedly, say the Townsendites,
there would be higher prices. Take
the price of a $50 suit of clothes.
There are seven wool-to-suit trans
actions between a sleeps back and
the mans back, and the tax would
amount to $219. The 2 per cent
transaction tax would, they admit,
add to II per cent to the general
cost of living. What of it?" they
ask. Pork has gone up 300 per
cent, with no more money to buy it.
Dow-Jones Averages Cited
Then, poses DR.. White: How do
the Townsendites know the per
cent will raise enough revenue?
Estimates based on Dow Jones
averages" replies Townsend head
quarters, are that the 1929 turnover
in dollars was 1165 billions, and a
composite" estimate is around 1910
billions, the Townsend base. At 2 per
cent this would raise $32 800 900, 900.
But they need only 18 billions to
pension ~ million old folks.
DR.. White says there is eXtant no
official estimate of total money
uol ttn f,.o, NJ
proach is a total of bank debts,
representing total business tranSac-
lions in which bank checks, drafts,
ETC., are used, in 141 principal cities.
This is 304 billions. Assuming that
other cities and towns transactions
of this sort would add one third
more to this sum, DR.. Witte esti-
mates 442 billions as the total.
400 Billions Tax Base
Since salaries for personal sert-
ices would be exempted, he esti-
mates 400 billions as the known tax
able base. Taxed at 2 per cent, this
would yield only $8,000,000, or
one-third Of enough. Hence, he says,
per cent rate would be necessary.
The dollar, argue the Townsend
ties, turned over" 1872 times in 1929,
% times in 1884. Take it at only 20
times and multiply that by the 50
billions of national annual income
and you get 1910 billions. That's the
Townsend tax base. But under the
McGroarty bill the dollar would
turn over about four times faster, or
528 times year, says DR.. Townsend.
Asked about that by Rep. Sam