Montana labor news., 1938-04-07
TOWNSEND PLAN
The Transaction Tax Will Solve
the Problem.

Last weeks article dealt with the
fundamentals of the Townsend Plan,
General Welfare Act Of 1887, H. R.
4199, and the first stone in that
foundation is the transaction tax,
first, because it provides the means
of carrying out the other provisions
of the plan; second, because it is the
best solution to u many tax prob
lens, and third, because it is the
only plan before the people that does
not require an appropriation and a
mortgage on the future, in short it is
a pay as you CO. plan.
This method of taxation has two
Directing factions with which to con-
tend and their interests are as far
apart as the poles; the banker and
big financier constitute one faction
and the laboring man the other. The
money interests are opposed to any
thing which will force them to carry
their share of the tax burden and
the transaction tax will do just that.
The laboring man is opposed because
he confuses the transaction tax with
the retail sales tax; he, at least, is
honest.
The retail sales tax, being a direct
consumers tax, must naturally take
its greatest toll from the man with
moderate means; when applied to
certain commodities, luxuries in a
way, this is not SO bad but when
applied to all retail sales it becomes
a burden that falls heaviest on the
man who a least afford it.
The transaction tax is an entirely
different tax and will equalize the
burden, taxing everyone according
to his ability to pay, it is, as the
name implies a tax on ALL tran
sactions, large and small; for in
stance, let us take a bushel of wheat
for example, assuming it sells for a
dollar; under the retail sales tax the
producer, the warehouseman, the
miller, the baker, the retailer pay nc
tax but the consumer pays a tax on
the finished product, in this case a
loaf of bread; under the transaction
tax each one of those transactions
will pay a tax and in many instances
the tax will be absorbed in the yer
head although, even were it passed
on to the consumer it would not
amount to more than one quarter
of a cent on the loaf Of bread; now
comes the joker that causes the big
fellow to balk; the Congress of the
United States made an investigation
of the Chicago Board of Trade some
years ago and found, among other
things, that a bushel of wheat
changed hands 5000 times between
planting and milling without ma
terially altering the price; under the
transaction tax each one of these
changes would be taxed and while
the consumer would pay the accu-
mutation Of the first taxes paid by
the producer, the middleman, the
baker, the retailer, he would not
have any part in the stock market
taxes, and assuming this tax to be
2 per cent, he would pay his proper
ton of 8 cents and the stock gambler
would pay $50 on the bushel of
wheat.
Another example: the man of
moderate income purchases a row
boat for $25, he will pay a tax Of
so cents; the financier buys a yacht
for $150,000, he pays $4,000 under
the transaction tax; under the retail
sales tax the man pays his so cents
but the financier gets out of paying
anything.
The soldiers bonus was a just debt
and the payment of that obligation
gave new life and vigor to business
so long as it lasted but how was 1t