Evening star., 1936-02-27
TOWNSEND PLAN
TORN TO SHREDS
Representative A. ]. Engel
Launches Bitter Attack On
McGroarty Bill.
BY WILL r. KENNEDY.

Now that the Townsendites have
abandoned their original mo COM
demand for a $200-a-month
pension, the second McGroarty bill
for as much pension as can be paid
seevral years hence through a trans
action tax is torn to shreds and tatters
by Representative Albert j. Engel,
Republican, of Michigan.
He explains how the transaction tax
will operate. itemizing in detail just
how it will be pyramided on the
farmer, the merchant. the banker, the
manufacturer and the wage-earner.
He emphasizes the advantage is
would give to the chain stores and
predicts ruin for thousands OF In
dependent merchants and for hum
dreds of struggling industries. He
shows the tremendous cost in addi-
tional taxes to Federal and State
governments, pointing out that the
tax runs through the entire span Of
life.
Mr.. Engel points out that the null
tiplicity OF duties to enforce the pro-
posed law would make 1t impossible.
He explodes the business turnover"
argument Of the Townsend chieftains,
by showing the fallacy of taxing one
dollar 600 per cent, saying: my
friend would have to cross-breed the
dollar with a guinea pig to make it
reproduce itself six times each year,
and make that 81 pay $6 in taxes"
Dire Results Predicted.
After a thorough analysis of this
second bill which Representative Nc
Groarty introduced on April Fools
day, last year, and which he says
sis the official Townsend bill' and
which the Townsend Weekly con-
firms, Representative Engel predicts
that 1t would u) lead to business
debacle and taxation worse con-
founded: (2) defeat for Congressman
who voted for it, and t3) tar and
feather for enforcement officers.
As a concrete example Of how this
proposed 2 per cent transaction tax
operates, he says: THE farmer sells
his wheat to the elevator. 2 per cent
levied. The elevator sells 1t to the
miller, 2 per cent levied. The miller
grinds it into flour and sells 1t to
the wholesaler, 2 per cent levied. The
wholesaler sells it to the retailer z
per cent levied. The retailer sells tina,
-four back to the farmer, another
per cent, plus all the taxes Levied
(total 10 per cent? from the time il
left MS hands as wheat until it get.
! back to him as -four. Still further. 9
per cent tax is levied on all pay.
rolls. freight and other charges fol
service or material. all of which lex
cept the payroll taxi is added to tht
cost the farmer pays. The same L
true when he sells a coWhide or WOO
and later buys it back manufactured
into shoes, harness or clothing. Th'
/ wage-earner, merchant and othe'
citizens will pay, of course, the same
pyramided tax under this bill tina
the farmer pays
One to IS Transactions.
|
DR.. Robert l.. Doane, DR.. Town
sends economist and statistician, il
testifying before the House Ways ant
Means Committee, stated that "th'
findings of the biennial census o
manufacturers indicate turnover o
approximately three times once tn
raw materials get into the manufac
turing process. OF course, it varies
Sometimes it may be IL or is times
in other cases only once" In othe
words. DR.. Doane states that ther,
may be from l to 16 transaction
while the raw material is goini
through the manufacturing process
each carrying with it per cent tax
He further states that the turnove
after manufacturing Is about thre
times and the average number o
transactions is six. This means tina
the consumer pays IL per cent ia!
on each article purchased. 1t doe
not take into consideration the ia,
paid on freight. telephone and electro
light bills, pyramided tax paid OF
materials, etc, nor the 2 per cen
tax levied against the payroll which
is paid by the wage-earner.
Representative Engel's studies shov
that the cost Of State and local gov
ernments would be increased from /.
per cent to 20 per cent, ultimately tt
be paid by the taxpayer.
Regarding the promise Of going II
increase business" Mr.. Engel says
What is the difference between l.
men spending 5000 each, a total o
| $2,400; or II of these men giving thei
5000 each to the twelfth man to spen,
the entire $4,000? In either case tn
amount spent is the same"
No End to Taxation.
"This Is the most far-reaching ia.
bill ever presented to any Legislative
body. You would be taxed and retaxe,
from the second you are born unit
after you are dead. Your father woul'
pay q tax on the doctor and hopita
bills and nurses salary. He'd pay
tax on the soap with which you ar
washed, the clothes put on you. You,
be taxed again each minute Of tn
day from then until you die. Eve
then they refuse to stop. They tax tn
coffin into which you'd be put, tn
undertaker's fee for embalming you
with tax on the embalming fluid
tax on the hearse and on the grav
digger, on the salary Of the preache,
on the coal to heat the church, on tn
crepe the mourners wear. a tax Of
your tombstone. on the probate judge
fee, the administrator fee-then the,
start In on taxing your heirs. The onl,
consolation you have is that you can
kick on the taxes you pay after yol
are dead"
Enforcement Impossible.
Trying to picture the multifariou
| requirements for enforcement tina
seem to make the task absolutely i'm
possible. REPRESENTATIVE Engel lists 1