Evening star., 1953-10-03
The Sales Tax Twins

The President seems to have closed the door
with a bang on retail sales tax Not only
that, but he did it voluntarily. He brought up
the subject himself at his Wednesday press
conference, perhaps anticipating but not wait
ing for any needing questions from the re-
porters
The questions from the reporters came
later, lending emphasis to the difference be-
tween retail sales tax and manufacturers
sales, or excise tax Answering these questions,
the President found refuge in more general
lied discussion. We have always had some
excise taxes he said and the Treasury is hard
at work now on tax program. He might have
referred the reporters to a passage in his tax
message to Congress last May
The wide variety of existing excise taxes
makes little economic sense and leads to I'M
proper discrimination between industries and
among consumers. Specific recommendations
for modified system of excise taxation will
be included in the recommendations for tax
revSions that will be submitted to the Con-
greSs next January
The President may have closed the door to
a retail sales tax because of the widespread
speculation that the Treasury would recon-
mend one and because the very idea is already
being denounced by the politicians who never
fail to make what capital they can out OF any
such discussions. He gave sound reason for
eXCluQlng 1nere are o0 SIdIeS, ZUU CIGAeS, SIX
counties and the District of Columbia already
dependent, for generous portions OF their rev.
enue, on retail sales taxes. That field has been
pretty we'll pre- -empted by the States and cities.
It is possible, of course, that the Treasury
will come up with proposal for manutac-
turerS' sales tax which undertakes to remedy,
by general application, the existing wide
variety of excise taxes. There is valid argu-
ment that such tax would be more equitable
than the existing pattern. And the prospect
of reform in this field, plus the need for reve-
nue., could make the tax acceptable.
But the Treasury undoubtedly knows the
hazards of any such an undertaking. There
is not a great deal of difference, in principle,
between retail sales tax and manufacturers
excise tax, except that the public is apt
to pay more under the excise tax, which Is
passed along and concealed than under
straight retail sales tax. The same arguments
against the sales tax will be used against
generally applied manufacturers sales tax,
with added trimmings. Any Republican admin
istration, moreover, will remember the political
ammunition handed to the Democrats two
decades ago when the Treasury, under Herbert
Hoover agreed to manufacturers tax at 2A
per cent The House licked it first by three
to-tWo vote; the Senate later turned 1t down
two to one, with accompanying displays OF some
of the finest demagoguery ever exhibited prior
to the New Deal. The Treasury has said nothing
about rates. Mr.. Sigh, president of the National
Association of Manufacturers, has thought out
loud in terms of maximum per cent-more
than twice the rate advocated in 1882.
The most reasonable attitude now Is to
wait for the Treasury's specific proposal. and
to examine it in relation to the existing system
of excise taxes and the need for revenue.