Montana labor news., 1947-01-09
OUR TAX PROBLEM
sy Arthur A. ELDER. ALL Tax Consultsrt
LThird in a Series OF Articles Oh TaNos-
Those State Sales Taxes

About ~ states have general sales taxes or DINER general "iSuil
ton taxes. They are: Alabama. Arizona. Arkansas California Colorado
Connecticut Illinois Indiana, Iowa, Kansas. Louisiana, Mnhisan Nj Mis-
sssppi. Missouri. New Mexico. North Carolina, North lmkoia, ONO
Oklahoma. South Dakota, Utah, WASHINGTON, West Nteinia and Nyo-
ming
In le45 these taxes yielded more than 75 million dollars
Almost all of that came from low income families Therefore almost
ali Of it cut down the goods and services that could he bought by the
low income families. which make up the bulk Of the buyin4 public
These states are getting their revenue the easy WAY Most OF The
sales faNes uerei imposed during the depression. as "emcleency mea-
sures~ often with the avowed purpose If paying for relief With the end
Of the depression. however. state legislatures preferred TO kecp the
sales taxes and in that way, avoided the necessity Of es'a1HsAma "
progressive system based on ability to pay.
For-make no mistake about 1.-THE sales fax $ the Nms opposite
Of a progressive tax. 1t falls most heavily upon those least a'e TO pay
As prosperity returned. legislatures should have switched o'er to corr
Grafton and graduated income taxes And now in the postwar period
as consumers demands ar taken care Of the sales tax ~Hl continue
to depress the purchasing power of low income groups 1t the very 'me
buying power is needed.
The state sales tax will only be the easy way Tor state governments
as long as people are compacent about accepting it. enc Q labor
major political Jobs therefore. is TO sur up an aWareness o. inc "' mat
sales taxes are unjust and contribute to derressions.
When the sales tax becomes a real political issue LEGISLATURES VIII
switch yer TO better ard sounder tax programs 1t might surprise
some OF the practical politicians to learn that the state income taN
revenue in 1915 was about 80 million dollars greater han total eFenHes
What Are the Best Taxes?
Why pay taxes anyway? Here's one simple explanation. We ray
taxes to do those things for ourselves through government that Me eh-
not do a well as individuals.
What taxes ar best? Tax authorities rate them, from the stand
point of justice and sound economy. a 5 follows
BEST: Graduated taxes IN income. based on ability to pay.
The federal government, and 81 states levy personal income taxes
Thirtytwo states levy corporation income taxes This Is IN best tax
because it can interfere least with consumption and because il follows
the principle of ability to pay. In some states the state taxing power
Is used TO raise revenue Whlehi IS shaieu WIN 'iues AM o"i '"i s'
ernments.
NExT BEST: Taxes on Property.
support for local governments Moves 10 cut the property tax should
be studied carefully to SCI whether the major benefits 90 to home own
err OF Il industry. There should be no discrimination against industry.
But industry should pay its fair share for the services it uses.
Home owners. whose property may represent 80 per cent OF the local
property valuation in an industrial community, will have nothing If the
property tax is reduced, while they pay the bulk of the sales or excise
tax levied to take the place of the property taxes.
II real estate taxes n insufficient to meet the needs Of the commune
INV ii will be well to determine whether industrial and commercial
property is assessed at its full worth, and to compare local tax rates
with those paid in comparable cities.
WORST: Sales tax. excise tax, payroll tax
Since these are not based on ability to pay and take a larger pro-
portion of the poor mans income, they are least desirable.