Evening star., 1953-10-01
New Tax Talk
0fG.O.P.S Stirs
Lawmakers Ire
Excises at Factory
Called Worse Than
National RetuiI Lew
BY the Associoted Press


Several congressional Demo-
Gratis opened fire today against
any Eisenhower administration
proposal for a national excise
tax at the manufacturers level.
In the wake of President Eli
senhower's news conference yes
terday. they decried such a tax
using adjectives like dangerous"
and "burdensome" and "discrim-
inatory."
They said the man in the
street probably would find him.
self harder hit by a manufac-
turer-level tax than by a retail
level tax. A tax on sales at the
factory. they argued. would py-
ramid prices on consumer goods.
The President, obviously aim
ing squelch at speculation
about a retail sales tax, took the
unusual step of authorizing some
Of his news conference remarks
for direct quotation.
Conclusions Adverse.
"For years." the President said,
i think I personally have put
my adverse conclusions on such
tax so far as the Federal Gov
ernment is concerned.
"The Treasury Department has
made a study, however, and they
find that all of the logic in the
situation is that this is a field
that belongs to local municipali-
ties and not to the Federal Gov
ernment, and certainly, there
fore, they have no intention Of
trying to do otherwise"
That part of Gen. EiSenhoWer'S
statement drew a round of gen.
eral applause from members Of
Congress. But Democratic OBJ
jections arose to his news con-
ference replies, not authorized
for direct quotation, in which he
declined to rule out sales tax
at the manufacturers level.
Gen. Eisenhower's reply that
he did not eliminate anything,
and that the Treasury is con-
Sidering how to reassort excise
taxes. seemed certain to stir
even more speculation about a
possible administration bid for a
manufacturers tax.
Eye Election Climate.
Indications were that next
year-when all 435 House seats
and one-third of the 96 Senate
seats are at stake in the con-
gressional election-would not be
the most favorable political cli-
mate for such a bid.
The principal distinction be-
tween an excise tax and a sales
tax is the point of collection.
While a retail tax would be
applied on the goods when
bought by the consumer, a man.
ufacturers' tax would be collect
ed on finished products as they
come out of the factory. Critics
contend the latter would be
SWelled by the time it reached
the consumer. with markups all
along the line, but supporters
deny this.
Treasury and congressional
staff specialists estimate a re-
tail tax would raise about ST.
lao. 100000 annually for each l
per cent of tax imposed. At
the manufacturers level, where
prices start off lower, that tax
would produce an estimated $753
million for each per cent.
Markups Hit Consumer.
Thus a per cent retail tax
would raise annually about $5.7
billion any increased sellers
markups. of course. would come
out of consumers pockets but
would not go into the United
States Treasury.
Two key members Of the tax
writing House Ways and Means
Committee-Republican Chair
man Daniel A. Reed of New York
and Senior Democrat Cooper Of
TennesSee-have declared oppo-
sition to any additional taxes,
barring a new national emerg-
ency.
Others who spoke out in oppo-
sition to a manufacturers tax
included Representative Eber-
harter, Democrat, of Pennsyl-
vania; Representative Dingell,
Democrat, of Michigan; Senator
Mcclellan, Democrat, of Arkan-
Sas. and Senator Green, Demoes
crat, of Rhode Island.
Representative Mason, Repub-.
lican, of Illinois said he would
support such tax only if it was
offered in lieu of the present
excise taxes.