Evening star., 1943-11-29
Sales Tax Hit
|byMorgenthau
As Undesirable
Committee Receives
New Request for
Increased Levies
Ry the Associated Press.

Secretary OF the Treasury Nor
genthau told the Senate Finance
Committee today under sharp
questioning that while he has
no "phobia" against the sales
tax, he believes it the least de-
sirable method of raising addi-
tional revenue"
Renewing Treasury recommends.
tions for 0,500, 900 900 increase in
Federal levies, largely through boosts
in income and excise rates, Mr..
Morgenthau ran into spirited cross
examination by sales tax advocates.
Senator Byrd, Democrat, of Vir-
glnia wanted to know if the witness
was so opposed to a retail sales
levy that he would accept only the
ST. ,140 900, 900 revenue increase pro-
vided in the House bill rather than
have sales tax imposed.
I've got no phobia against the
sales tax the Secretary replied,
but it is the least desirable of all
methods of raising additional rev.
enue"
Sees Many Exceptions.
Secretary Morgenthau said it was
his judgment that by the time Con-
gress got through considering a 10
per cent sales tax, it would not
impose the levy on food, medicine
and clothing and would decline
to place a new tax on top of the
excise imposts which now cover
many items.
He said the results would be that
probably no more than 81 900 900 900
new revenue would be raised at an
administrative cost of $4,000, 900.
Senator Byrd said he was propos-
ing sales tax only as an emergency
war measure and gave figures in
tended to show that the burden
would not be too heavy on low
income groups.
Clark Backs Morgenthau.
Senator Clark, Democrat of Mis-
souri,, sided with Secretary Morgen-
thau, with an assertion that unless
food, clothing and medicine were
exempted, such levy would Impose
an intolerable burden on the poor.
man.
Mr.. Morgenthau renewal of the
Treasury recommendation for tax
shift which would lift income levies
of about 5000 900 persons in the
lowest brackets was accompanied by
the assertion that this group would
pay about $1,000 600 900 through in
creased excise levieS.
This provoked Chairman George
to assert that the figure showed the
source Of some of the iniationary
pressure on prices.
1T seems very clear" Senator
George said, that if these 5000 900
people are spending anything like
81 900 100000 in excise taxes that
you are close to the inescapable
conclusion that there is ire
mendous pressure on prices in that
group"
Reaffirms Stand.
Senator George asked if 1t was
Secretary Morgenthau's position
that the Treasury was not recon-
mending any type of sales tax and
that its opposition to compulsory
savings was unchanged.
That is correct" the Secretary
replied.
IF We are to step up taxes, In
view of the already rapid stepup
that has been made. then the COM
mittee probably would want to take
the view that all methods of raising
taxes ought to be left open. even
though you don't agree" Senator
George said.
Secretary Morgenthau told the
committee that the $2,140,0O0, 900
House revenue measure falls far
short even of an attempt to meet
our fiscal needs in a realistic or
courageous way"
Warns of War Cost.
In the face of an assertion by
Senator George that it will be i'm
possible to enact bill varying
greatly from the principles of tho
House measure, the Treasury Secre-
tary reminded the committee of "ths
stupendous bill which this war will
leave behind" and declared:
If we pay in taxes any less than
we can now afford to pay, we shall
be unfair to those who must face
the accumulated bill after the war
has been fought and won. -" We
shall not only be asking the 10000
900 members of the armed forces to
give the most important years out
of their lives to fight the war. We
shall also be requiring them to pay
in taxes after the war what we could
and should have paid while they
were fighting"
CriticizeS Reduction.
Secretary Morgenthau said the
Treasury had carefully reviewed"
the fiscal situation since his appear
|ance before the House Ways and
Means Committee, in view of the
(See TAXES, Page A-4J