Evening star., 1937-06-27
Purchasing Taxes.

The Senate District Committee, which
tomorrow begins its study OF the omnibus
tax bill, will doubtless be impressed
with the bills effects on the cost OF living
in Washington. All taxes, of course, in
crease the cost of living High taxes
imposed on local real estate represent
one Of the important contributing fac
tors in high rentals. against which men,
bers Of Congress are constantly COM
planning. Taxes represent an important
part in the cost of everything.
But main reliance for revenue in the
pending omnibus tax bill is placed on
the business privilegegross receipts tax.
The chain store tax amendment to this
bill has aroused considerable local op-
position because it so directly affects the
price of necessary commodities that
are bought by thousands of people every
day. But the whole business privilege
gross receipts tax is, as drawn, peculiarly
vicious in its effect because 1t will bear
down hardest on those whose volume Of
business is large-uith no reference to
| margin OF profts-and because the tax
, will be pyramided and passed along most
easily by those who deal in food. cloth
ing and the other essentials of life.
The gross receipts tax is form OF
sales tax, although one may beat the
devil around a stump and claim that it
is not. AS levied in the States, with
carefully drawn rate structure designed
to apply equitahly to the different classes
of business taxed, the gross receipts tax
| may be a successful form Of sales tax.
But the one-rate idea, found only in the
bill proposed for the District, is not only
ineQuitable and possibly highly damag
ing to many forms of business, where
volume is large in relation to profit, but
it departs from the fundamental prln-
ciple of a sound sales tax-that principle
being to tax most heavily the luXuries
and the non essentials and to tax most
lightly the necessities such as food and
clothing.
If the Senate decides to retain this
tdA Vic ctC oli ASlU1C SllUUIO DC Cdl
fully overhauled. The attitude of the
District Building in this connection is
difficult to understand and. plainly
speaking, is indefensible. The bill was
hurriedly thrown together at the Dis
trict Building, 1t is true. at the direction
Of the House District Committee. But
though its inequities have been pointed
out and are apparent. there has been no
disposition at the District Building to
correct them by attempting to draw up
modified rate structure. The District
Building, in fact, seems to regard the tax
bill wholly from the point Of view Of the
tax collector, with no attention paid to
the interests of the taxpayers. That at
titude is not in keeping with the ira
dition that the Commissioners represent
in theory, the people Of the District
When the Commissioners step aside
with the explanation that they are mere
ly interested in getting the money. they
are taking a new role-and one which
does not fit them we'll.
The proposed segregation Of the auto
mobile weight tax in the highway fund,
where it will not be applied to the gen.
eral fund deficit, is another serious mis-
take which should be corrected by sub
stituting the weight tax-as always pro-
posed before-for the existing personal
property tax on automobiles and max
ing the revenue available for general
fund use. The only excuse for the
weight tax now is the pending deficit In
the general fund. II it Is not applied
to that deficit the tax should be elm
mated.
The inheritance tax schedule, as re-
written by House amendment, throws
that bill out of Joint merely to ac-
complish gesture at soaking the rich"
1t is not certain that the higher rates
would yield much more revenue, when
considered in connection with the estate
tax. And the estate tax is defective in
its present form. as 1t does not include
as State legislation does-the credit
allowed for inheritance taxes peid. The
irony OF this omission is heightened by
the fact that the bill does credit such
payments made to the States and terri
tories.
An important part Of the Senate
Committees work will lie In a careful
examination of the estimated yield Of
revenue from the tax measures. The
House bill, by conservative estimates,
would produce at least $4,000 Cooper
maps $ll,oOo,0oo. The general fund
deficit is estimated now at $1,000. .ooo
On top OF the other taxes, the District
bill imposes tax increase of $500. 600
on water rent payers.
The Senate District Committee faces
the two-fold duty of preventing excee-
sive local taxation and Of assuring the
equitable application of the taxes finally
selected.