The Waterbury Democrat., 1942-06-29

\ VAAVAkAA " GG84 50 pages Q night, 1t would still take you six weeks just to read the testi- mony of experts and witnesses who appeared in long processions. And this Wordage does not cover the exc ecutive sessions of the committee. Two full weeks, for instance, were spent in arguing about the corpor. ate income tax provisions.
 As sent to the floor of the House for debate and passage early in July, 1t will be a political tax bill, for this is an election year. The ia- dicated total revenue to be derived is far below Treasury suggestions. That may be changed by Senate action, but the House committee has given in to demands to keep 1t low.
 The principal political aspect of the House bill is the absence of a federal sales tax. Labor and a lot of other consumer pressure groups didn't want one and the Treasury and the White House backed that stand. But some of the committee members predict federal sales tax will be in the bill written next year, and no fooling. Agitation for 8 gem eral manufacturers federal sales tax has been brewing for so long that, once the election is out of the road, 1t stands the best chance 1t ever has had for passage next year, although 1t was licked in 1917, 1921 and l932. EXCISE
 TAXES
 In place of the sales tax there will be new excise taxes. the good old familiar nuisance taxes that crop up in every war emergency. Things like taxes on checks and maybe taxes on Isoft drinks. These new taxes are hard and often costly to collect. There is no experience on collect ing the proposed tax on freight and only the experience with social se- curity deductions to tell how the fancy new salary withholding tax will function.
 From the Treasury point of view, however, these diflculties are as nothing when compared with the difficulties of putting over a general manufacturers sales tax. This manufacturers sales tax isn't to be confused with the retail sales tax now levied by over 30 states, giving them a prin. cipal source of income, easily col- lected and relatively painless to the taxpayer. The manufacturers sales tax is something else again. FISH,
 FRINSTANCE
 First take the problem of deter. mining who Is manufacturer. Is It the manufacturer of fishhooks, the man who catches the fish, the man who manufactures the tin cans in which the fish is packed, or the man who packs the fish in the tin cans and pastes on a four color label? Or are they all manufactur. CTS and do you tax them all, plus the man who prints the labels, the manufacturer of the beat used by the fisherman and the nan who made the wagon to haul teh stuff to marketp
 If the manufacturers tax Is as. sessed at the first level, the tax is passed on to the second and third manufacturers and eventually to the wholesaler, the retailer and the consumer. It Is usually pyra. mided in such fashion that 1t eventually becomes 6 Sizable in- crease in the cost of living, instead of just 2 or 3 per cent tax.
 Proponents of a manufacturers sales tax point out that Canada has put over the manufacturers sales tax without too much trou- blbe. But U. s. tax experts say the proble m of administering a manufacturers sales tax in Can- ada, with It's limited industries and a population of Il million, cant be compared to the problem of the highly industrialized U. s. with Its 130 millions.