Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-01-25
Sales Tax During War
Urged by Bookings;
Disney Plan
Institution Believes Levy
Would Stabilize Prices;
5-BiIIion Yield Seen

Proponents of a Federal sales tax
have received new support from the
Bookings Institution and Repre-
sentative Disney. Democrat. of
Oklahoma, a member of the House
Ways and Means Committee.
The institution, a private research
organization, recommended a Fed
eral retail sales tax as a war
measure.
Such levy, its report said, would
distribute the YAK burden more
widely over the population" and
would also be much more effective
than most taxes of similar yield in
stabilizing the price situation, be-
cause it would be chiefly out of
money that owners would otherwise
seek to spend for current consump-
ton"
Called Desirable Now.
THUS" the report commented,
"the very character of the sales tax
which makes it Objectionable in
peacetime, especially during a de-
preston, becomes an advantage
under the conditions which now
exist"
The. institution estimated that
tax of about 10 per cent on all retail
sales, excluding housing, medical
care and education, would raise
$4,000, 000, 900 If there were no other
exemptions. The levy could be eased
on the lowest income group. the
report suggested, either by exempt
ing all food items or by a fiat ex-
emption. If exemptions were made,
however, the rate would have to be
increased 2 or per cent If the
$4,000, 900, 900 return was realized.
it added.
Sees Other Problems.
Mr.. Disney advocated sales tax
in a statement which said it would
give us an approach" to raising the
s16,Oo0,000,000 added revenue which
President Roosevelt requested.
mo proponent of the $4,000. 00O,-
900 additional has suggested a more
feasible, easily administered plan
than the sales tax" Mr.. Dosney
said
Mr.. Disney declared that more
was involved in the tax problem
than pay-as-you-go plan for COL
lecting personal income taxes which
the Ways end Means Committee will
consider this week.
Coupled with pay-as-you- and
related to the tax program" Mr..
Disney said, ARE the following fea-
lures, which in my opinion, the
committee will be forced to con-
slider: Cd collection at the source.
90 the raising of $4,000, 900 900 ad-
dltlonal revenue, go the extension
of the debt limit, "a re-negotiation
OF war contracts, (5) $4,000 income
limitation"
Would Be Paid Currently.
The Brookings' report said adj
vantages of sales tax lie in the
fact that it would be paid currently
and its ability to reach income
which otherwise could not readily be
tapped.
Most Federal taxes tend to reduce
savings rather than spending and
they consequently are not effective
checks on the development of sellers
markets and the resulting weaken
ing of the Nations efforts toward
controlling prices and keeping down
the cost of living" the institution
said.
The study found that tax on re-
tail sales would be far more desirable
than any other form Of sales levy.
Simplicity Of administration and
ease of collection could be obtained,
the report said, by a system involv-
ing the sale of stamps to retailers
who would give them to customers
as evidence of payment of the tax.
Administrative Difficulties.
A turnover tax applying to all sales
in all levels of production would dis
criminate in favor of large concerns
which carry goods through success
sive stages of production from the
raw material to the final sale, the
institution declared, adding that the
task of administering price control
would be made more difficult by the
concealed taxes in the final price
A tax on manufacturers sales
would involve serious Inequalities
and administrative difficulties, the
report commended. Because of the
variety OF operations at the manu-
featuring level, collection could not
be made by means of stamps, but
would require elaborate facilities for
the filing and examination of returns
IN collectors Offices, 1t was said.