Evening star., 1949-12-17
The Political Mill
Income Tax Rise Likely
With End of Excise Levy
Truman Must Seek New Revenue
Or Go in for Big Deficit Spending
Bv Gould Lincoln

President Truman and his Secretary OF
Commerce, Charles Sawyer, are talking about
reducing some of the wartime excise taxes
those sales taxes put into effect to aid IN
the war effort, which now irritate lot OF
people four years after the close OF hostilit1es.
These taxes are levied on "luxuries," many
of which have come to be regarded as neces-
sites in everyday American life. Nothing
definite yet has come out about the reduction
or repeal of these taxes, but Mr.. Sawyer has
favored the idea on the ground that it would
lift burden off business. Mr.. Truman has
merely said such changes are being discussed.
With the country facing five billion dol
lar-or more-deflcit at the close Of the
present fiscal year, 1t seems clear that il
these excise taxes are reduced or repealed,
the President will have to seek revenue from
increased income and corporation taxes
or definitely throw UP his hands and go in
for deficit spending in big way. He might.
if he wished, follow the advice given by
Senator Byrd, of Virginia, and cut the Fed
eral budget for the fiscal year 1851 to $780,
000. 100000 But from all reports he is hav-
ing trouble keeping the budget total down
to $42, 900 10000
Favored by COP
The Republicans in Congress, under the
lead of Representative joe Martin of Mass,
Minority Leader Of the House, declared them
selves in favor of immediate reduction or re-
peal of these wartime excise taxes, early in
the last session of Congress. 1t is evident,
therefore, that any proposals to take these
taxes off the necks of the people will receive
COP support when the second session OF
the 81st Congress begins in January. Mr..
Martin himself introduced bill last Febru-
ary terminating those wartime taxes. But
when it comes to increasing tax rates on in
dividual incomes and businesses, the admin
istration will come in for lot OF criticism
from the Republicans. II hundreds of mil
tions Of dollars Of revenue are to be lost to the
Government by reason of reduction of the
excise levies some substitute will and must
be sought.
The payment of tax on jewelry-it il
now 20 per cent of the sales price-may be
justified on the ground that people can do
without it and it is not a necessity, although
this is disputed by the manufacturers.
However, is per cent tax on rail, air and
bus tickets strikes sour note. 1t Is eSti-
mated that this tax will take $3.50 900
out Of the pockets of Americans during 1949.
Nor does the ordinary man relish paying
a 20 per cent tax on electric light bulbs and
radio tubes. This last tax will cost the peo-
pie $26 900, 900 this year.
Whether an automobile can be classed
in these days as luxury or not. to great
many people, especially those living in rural
communities, an automobile has come to bs
regarded as a necessity. The Federal Gov
ernment is collecting in excise, or sales.
taxes on trucks, passenger cars, parts and
tires and tubes total of $764 900 this
year. The tax rate on trucks is per cent
and on passenger cars per cent
The Federal tax on radios will yield $751;
900 900 in 1949, levied at 10 per cent on sales
| prices A similar tax on sporting goods will
bring in $21 100000.
Phone Tax Gripes People.
What really gripes the people. however, Is
paying IS per cent tax on local telephone
services, a Is per cent tax on long distance
calls which cost over "a cents, Is per cent
tax on kilograms and radio messages in the
United States and 10 per cent tax on in
ternational messages. These taxes will take
from the people more than half billion
dollars this year-$544, 900 900 according to
the expert estimators.
Whiskey, wine and beer may not be
placed in the category of necessities but
they are popular. Excise taxes on these
liquors are not new, but the wartime taxes
went sky high. The tax on distilled spirits
rose from $6 a gallon to $9 The Govern
ment in 1888 collected $294,477 1894 in taxes
on distilled spirits and wine, and in 1946.
,872,232147 The estimated Government
take for 1949 is, however, only 81 438 ,000, 900.
These excise taxes cover many other
items, among them ladies' bags and luggage,
gasoline refrigerators and air-conditionlng
units II and when the proposed reduction
and repeal Of these taxes is brought up
there will be loud cry from all producers