Evening star., 1943-01-26
Federal Sales Tax

1IC TleSlueilO, Ill Ills DuQgeJ mes
sage to Congress, has recommended
raising an additional $4,000, ,O0O, 900
| year in new revenue or forced
| savings. The methods to be adopted
| in raising this huge additional sum
are still to be selected. The Treas
ury Department will have it's recon-
| mendations-and 1t is to be hoped
they will not be as long delayed as
were the recommendations it sub
mitted to the last Congress. In the
end, the Congress will have to make
the final decision.
Two considerations deserve special
attention. The first is the enact
ment of tax laws which are fair and
equitable. The second is the collec-
ton of the taxes after the laws have
been enacted. Unless the money
rolls in, tax laws are failures.
The Brookings Institution, after
careful study, has released it's rec
ommendation for wartime Federal
retail sales tax. The reasons ad-
vanced for such tax, estimated to
raise $4,000, 100000 at a 10 per cent
tax rate with housing, medical care
and education exempted, are that the
tax would be comparatively easy to
administer and that it is suited to
war time conditions and obiectives.
Certainly such a sales tax is col
lectible, which answers one of the
prime questions of tax levying.
Secondly, it would be paid currently.
Thirdly, it would reach income which
otherwise would not be tapped. A
retail sales tax has been used to
raise revenue in many of the States
In the past. 1t has proved effective
and for the most part, this form of
taxation has not come In for a great
amount Of criticism from the tax
payers themselves.
AS stabilizing influence, the
Brookings Institution points out in
its report, a retail sales tax would act
as deterrent to imitation. 1t would
be paid out of money that owners
have on hand for current consump-
tion. In this respect, it would differ
from most Federal taxes, which tend
to reduce savings rather than spend
ing. This Is especially true of the
income tax.
1t is urged also that the retail
sales tax Is more desirable than a
manufacturers sales tax-the kind
OF tax which has been put forward in
Congress before as remedy for lack
OF revenue. For the retail sales tax
would be easier to administer, it
would be fairer and less discrimina-
tory, and would make the task of
administering price control easier,
avoiding concealed taxes in the final
price to the consumer.
The institution adds that, if neces-
sary. exemptions could be provided
for customers who were least able to
meet Federal retail sales tax by
issuing tax-prepaid coupons direct
to consumers. If the exemption
amounted to 5000 for an individual
and $500 for married couple, the
tax would have to be raised two or
three per cent to make the increased
revenue from the tax reach the
$4,000, 100000 mark.
A Federal sales tax has been pro-
posed many times in the past. In
deed, at the close of the Hoover
administration, the then Demo-
cratic-controlled Ways and Means
| Committee Of the House came for
ward with revenue bill containing
a sales sax. In the final showdown,
however, the tax was defeated in
the House, and President Roosevelt
made his influence felt against such
tax at the time, and has been
against it ever since With the in
creasing need of further taxes, how
ever, the administration may be
forced to come to some form of gen.
eral sales tax.
|
IF 0nlV wear anI ho1f