The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1941-08-22
TIE MANUFACTURERS TAX

The proposal for a tax at the
source OF production as advocated
by Senator Arthur H. Vsndenberg,
seems 10 be gaining favor despite
administration objection. It would
provide big addition to the tax in
come and would be comparatively
easy TO collect. The general obJec-
ton is that taxes so levied are
likely TO be passed on 10 the con-
sumer. AS wages and other pro-
duction costs increase, however,
IL is more generally admitted that
more tax money must be collected
from the lower income brackets.
The high incomes are too limited 10
furnish anything but a very small
portion of the total amount need
ed, even though the tax rates on
big incomes have been increased TO
almost conf1scatory proportions.
Commenting on Senator Vanden-
berg's proposed new tax, the Wash
ington Post says:
Senator Vandenbergs proposal
10 levy a fve-per-cent sales tax upon
manufacturers, with exemptions
for food, clothing, and medicine, Is
worthy OF careful consideration.
For II would not only produce
greatly needed additional revenues;
it would also permit elimination Of
some OF the discriminatory new
sales taxes that would be imposed
10y the House bill.
General sales taxes are usually
opposed on the ground that they
put an unfair burden upon consum-
ers in the low-income classes. That
objection loses some OF it's force
II articles OF necessity, such as
food and clothing, are exempted
from taxation. Moreover. We are
now confronted by conditions which
necessitate throwing overheard
some OF the principles that would
ordinarily guide US in levying taxes.
There is pressing need for more
revenue, and there il no way OF
getting the amounts required ex-
cept by heavier taxation OF low-in-
come groups. Lowered incoms-ta1
exemptions would supply some ad-
diuonal revenue, but Congress
balks at that unpopular suggestion.
Furthermore, sales taxes provide
a convenient and, politically speak
ing. comparatively safe method OF
getting people to contribute TO the
support OF the government. Con
gress recognizes that fact by rely.
ing heavily upon special excise
taxes to supplement returns from
individual and corporate income
taxes.
The bill passed recently by the
House carries long lists OF new
manufacturers excise taxes and re-
tailers' excise taxes, besides in
creases in the rates Of such special
sales taxes now on the books.
Every time new levies OF this kind
are imposed or existing ones In
creased. the industries concerned
complain OF Observation-Disclosures
with reason. That undoubtedly
helps to explain why the National
Association OF Manufacturers 10 on
record in favor OF a general sales
tax. either in the form Of TAI o.
retail sales or a Manufacturers sx.
else tax. OF course. the established
excise taxes on tobacco and liquor
are in a special category, as Sena
tor Vandenberg points out, and for
obvious reasons would not be in
Guided under limited general sales
tar proposal.
Thus far Administration opposi
ton has been a stumbling block N
the way of action. But as the
search for more revenue continues
the pressure to extend the sale:
tax until it covers industry In gen
eral instead OF selected groups o.
industries will almost certainly
become irresistible"