Evening star., 1937-05-21
Lesser of Two Evils,

NAASSHA4tS
local income tax the Commissioners were
hctuated by many important considera-
tlonS. Most of these are covered in the
fact that collection of local income tax
in the District of Columbia-With its
extraordinary proportion of non- direct
taXpaying non-residentS and Federal
employes-raises many complicated ques-
tions in law and in equitable applica-
ton of the tax that are not encountered
In the States. Because the District is
faced with an emergency IN the imme-
diate deficit Of the next fiscal year, rash
experimentation in the abandonment of
the productive tax on intangibles in
favor of a locally untried income tax
would be unwise.
The choice between two taxes is, of
course, q choice between two evils as
far as the taxpayer is concerned. But
the choice of light sales tax, exempt
ing such necessities as food, clothing
and medicine, is the choice of the lesser
OF two evils.
The sales tax has gained amazing
popularity in the States, and while there
is some duplication as between local
sales taxes and the Federal excise or
nuisance taxes, on some articles, the
States have found the sales tax about
the only field left to them for revenue
raising-outside of property taxes-that
+oS To-
AS for the growth of the sales tax in
the States: Only two States were COL
lecting general sales taxes in 1880, OBJ
tanning therefrom a yield Of about ST.
100000. Up to and including part of
the year 1886, the latest figures imme-
diately available, twenty-five of the
States we're collecting general sales taxes
which produced S284 100000. Outside of
property taxes the general sales tax has
become the third largest source of reve-
nue. in the States which have adopted it,
the largest being the gasoline tax and
the next largest the tax on motor vehicle
registrations and licenses.
AS contrasted with the local income
tax, the sales tax in the States has shown
It's great superiority as a revenue pro-
ducer. Local personal and corporation
income tax revenue in the States fell
off over S83 100000 between 1880 and
1896, despite an increase of eleven in
the number of States imposing local in
come taxes. AS everybody knows, the
increasing revenue needs of the Federal
Government make almost inevitable
broadening of the base of the Federal
income tax, reaching down into the lower
brackets which thus far have happily
escaped. This will tend to place more
reliance upon the sales tax for local reVe-
nues with the concurrent effort-now en-
couraged by the Federal Government-to
avoid the further duplication of income
taxation as between the States and
the Federal Government.
Should the recommendations of the
Commissioners be followed in adopting
the principle of sales tax, the effort
must be made to confine its provisions
to the least essential commodities by
exempting the necessities. Study must
be made of the question whether it is
not more equitable to the small business
men to collect the tax on each taxable
transaction, rather than on gross sales
The latter perhaps simplifies admins
tration but is sometimes criticized be-
cause it is more burdensome to the
'little fellow than to the big fellow
Above all, the sales tax should be kept
at the minimum of revenue needs. Be-
cause it is painless" tax, it is, like the
gasoline tax, easily susceptible OF aouse.
More thorough inquiry into the question
of potential yield may show that one
per cent, in place of the two per cent rate
tentatively suggested, may suffice to
meet existing revenue needs when
coupled with other proposed taxes