Evening star., 1942-08-05
Retailers Urge
so Sales Tax at
Senate Hearing
Spokesman Insists
Levy Would Be
'DefIotionoy'
Ry the Associated Press.


cent retail sales tax, to be in
force until six months after the
end of the war.
Disagreeing with the Treasury
Departments contention that Fed
eral sales tax would be inf1ationary,
Jay Iglauer, chairman of the asso-
ciation's Taxation Committee, de-
clared such a levy would be dis
tinctly deflationary" and would sy-
phon off considerable excess pur-
chasing power.
Senator Vandenberg. Republican,
OF Michigan agreed with Mr..
Iglauer's conclusion, declaring "It
is absurd to say that fixed Gov
ernment tax is inflationary"
Would Exempt War Materials.
I'VE propose the adoption OF q
war retail sales tax of per cent
OF the purchase price of all tangible
personal property to be paid by the
consumer at the time OF purchase"
Mr.. Iglauer told the committee. "It
should apply to all sorts of tangible
personal property, much of which
may not commonly be sold through
retail stores. =.
TN addition to everything o,di-
narily known as consumer goods, it
should apply to all purchases of ma 3
chinery, fixtures, supplies, factory
and store equipment, ETC.; exempting
only the purchase of such items as
are required for the production Of
war materials.
The tax should not apply to per-
sonal' or professional services, such
as those of physicians. dentists, at
torneys, or to salaries and wages,
or to rents, or to the cost of insur--
ance. This recommendation con-
templates the repeal of the manu-
facturers' excise taxes except those
on tobacco, liquor. gasoline and oil.
and the repeal of the retail excise
taxes on furs, jewelry and toilet
goods
Senator Brown, Democrat, OF
Michigan said he believed that II
sales tax was necessary. consid-
Grafton should be given to extend
ing the levy over services as we'll
as goods. Mr.. Iglauer said his
recommendation was based on the
problems of administering and col
lecting tax on services.
Complicated Task.
Retailers generally have always
opposed consumption taxes in ordi-:
nary times" Mr.. Iglauer said. TT
makes their task of selling goods
more difficult. Now, in war time,
we welcome the opportunity to help
with the war effort by assuming
heavy burdens of expense and ad-
ministration in connection with pri-
critics, sacrifices, transportation,
price control and taxation" 81
He declared that about 28h per
cent Of the national income is
earned by people making less than
$4,000 a year. ri
Under our income tax system
comparatively few of those people
pay any income tax" he declared.
In view of the great national emer-
gency, it seems equitable and advis-
able to spread the base to every
body earning income
He figured the per cent sales
tax would add about $2,500, 900 900
of revenue.
New Debt Credit Plan.
A debt credit plan of tax relief
appeared, meanwhile, to be in the
ofdng today for the little fellows who
pinch pennies to pay the monthly
installment on their homes as well
as for proprietors OF civilian busi-
nesses facing higher taxes and
shrinking revenues.
Still vague in details, the plan
had varying degrees of public in.
dorsement from majority of the
2l members of the committee. which
IS considering the revenue bill call.
ing for $6,27l 900 900 in new taxes. !
The proposal would permit indi- {
viduals to subtract from their
taxable income an amount equal to
payments actually made on invest
ment debts they contracted before
specified date, possibly January
l, 1912.
Would Limit Amount. @
The amount which thus could be
charged off would be limited to q
certain percentage of the income
just as deductions for charity dona-
tlons cannot exceed Is per cent
and probably would be further
limited to a total ranging from $500
to $500. 80
Suggested deductions under this
proposal included payments on home
mortgages, life insurance premiums
and other relatively essential debts.
The aid for debt burdened busi-
nesses would be carried out on a
somewhat similar plan. with both
proposals possibly combined with a
postwar tax rebate for those indi-
viduals and corporations not reouir-s
ing special relief.
Chairman George, who has called
the debt credit plan "sensibly
sound" told reporters that a great
zeal of work would have to be done
on the proposal to make certain that
1t was applied equitably to all tax
payers and to prevent loopholex
from developing.
Indorses Hobby's Plan.
He said he approved generally 4
proposal made to the committee
yesterday by w. P. Hobby, publisher
of the Houston, Tex, Post and for
mer Governor of Texas, to allow
small businesses without war con-
tracts credit against surtaxes of
S per cent yearly of the amount
OF their outstanding debts for re-
tiring those obligations.
Senator Taft. Republican. of Ohio
said ne favored merging the indi-
vidual and corporation proposals in
one comprehensive plan, covering
debt payments, Government bond
purchases and postwar rebates for
taxpayers who had no need of the
relief provisleps.