The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1937-07-15
SOMEONE'S PICKING YOUR POCKET!
It's the Hidden Tax Colector-He Respects Not Even the Real
Necessities of Life and How He Walops Your Budget
BY WILLIAM c. UTLEY

BY WILLIAM c. UTLEY
no YOU make $3.50 month?
~ If you do, you'll be inter-
ested-and perhaps little sur
prised-to learn that the tax
collector picks your pocket to
the tune of one-eighth of your
income. He sneaks enough from
the family wallet in two years
to buy new car.
Yes, he picks your pocket. For
this 'take"-which amounts to 1877
cents out of every dollar-repre-
sents indirect, or hidden" taxes.
They're not like your income tax
or personal property tax or state
retail sales tax, for you rarely know
when you have to ''shell out" for
them. They're concealed in the
price of the goods and services you
buy, even the bare necessities of
life such as bread and shoes. death
and taxes are inevitable all
too often invisible.
These are only few of many IL
Illuminating revelations to come
out of survey just completed by
the Family Economics bureau of
the Northwestern National Life In
surance company, of Minneapolis.
The study was started in Novem-
Der, 1885. Records of 206 concerns
public utilities, insurance compa-
MES, manufacturers, jobbers and
retailers-were investigated sin an
effort to measure as accurately as
possible the proportion of prices
paid by the consumer for which
taxes-federal, state and local are
responsible.
All levies which would not nor
mally be included in the cost of
goods and services sold were omit
ted in the calculations which fol-
lowed from the original producer
to the retailer. The principal taxes
entering into the picture then were:
Farm and urban realty taxes, per-
sonal property and general prop
erty taxes of business concerns, ex-
chise taxes, licenses, fees and fran
chises, moneys and credits taxes,
gasoline and oil taxes on motor
truck deliveries, import duties and
the tax element in freight costs in
volved in the various steps of dis
tribution.
Taxes Are Passed On.
To understand the figures it is
necessary to understand how some
of these indirect taxes work. ''In
the case of a retailer who owns
the building which houses his store"
says the report, real estate taxes
are shown on his books as an item
of overhead, and their participa-
ton in the makeup which he
must add to his cost prices can be
measured with considerable GER
tainty. -
However, if he rents his store
building, the taxes on the building
are necessarily contained in the
rental paid, and are just as surely
a portion of his overhead expense,
even though concealed in the entry
rent
''In the wholesale price which the
retailer pays for his merchandise is
necessarily contained an overhead
element consisting of the real estate
taxes on the building occupied by
the wholesaler, and just as neces-
sarily, taxes on the factory which
produced the goods contribute por-
ton of the price charged the jobber
by the manufacturer.
''This study" the report contin-
ued, "has undertaken to include in
the figures finally attained the prin-
cipal elements affecting ultimate
prices charged, whether actually
listed as taxes on the books of
the business, or contained as por-
ton of some other entry"
Social security taxes were not con-
sidered, because they are in
sense deposits for future withdraw
al" Gasoline taxes were computed,
because gasoline and oil are SUBJ
iect to local taxes in all 48 states
and the District of Columbia, in
addition to the federal levy.
Tax-Grabber Is Killjoy.
The researchers estimated that
the average workers family with
an income of $3.50 month spends
S43.50 for food; of this IL per cent,
or $500, goes to the hidden tax col
lector. Of the $50 spent for shelter,
hidden taxes take more than a
quarter, $3.50. They account for
per cent of the SIC clothing bill, or
S1.28. Fuel and light cost S1l, but
9.5 per cent of this, or $l.05, rep
resents indirect taxes.
The tax-grabber really cuts into
the family's enjoyment of life. The
cost of an average used car, includ-
ing license, and gas and oil sales
tax, is $1450 month; hidden taxes
get 2O.1 per cent-$2.91. And the
$500 the $150-a-month family can
set aside for recreation includes
30 cents for the tax-grabber, who
seldom shows his face.
Insurance bears a lighter tax
load. OF the $500 spent monthly
for that protection, only &c per
cent, or Is cents, falls into the hid
den tax barrel. Sundries and mis-
cellaneous items-toothpaste jewell
ny, tobacco, etc.-which cost SGT a
month re burdened with taxes
amounting to 1912 per cent, or SITS.
The hidden taxes which eat away
at an $50 monthly income are slight
ly less in proportion, since it is
assumed that such an income does
not ordinarily permit the owner
shin or nneratinn of an automobile