Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-10-10
Stutes to Ruise
Taxes, but on
Which Items?
BY ELMER ROESSNER

The big question about State
taxes is not whether they will
go up-they will-but which
levies will be increased the most.
This question is important to
individuals, businesses and the
staterS themselves. There's al
ready quite a bit of shopping
around for favorable tax loca-
lions by individuals and COM
panies. This shopping will in
crease as State taxes rise.
State taxes averaged s81 so
a person in the year ended June
30, according to Commerce
Clearing House figures. That
compares with $64 in the year
ended June 80, 1852. Voters
clamor for more roads and high
ways, more recreation lands.
more schools, more medical care
and governmental hand-and-
head-holding makes it inevitable
that taxes will keep on going up
year after year until voters call
a halt.
Sales Taxes to Rise
State officials are aware of the
current shopping around, and
this will influence their actions
in raising taxes. States that are
encouraging the immigration of
retired persons will be slow to
raise inheritance taxes or to
levy sales taxes on medicines.
States seeking new plants will
not jump taxes on gross receipts
nor apply burdensome levies toI
payrolls. Where residents CAM
easily cross State lines to do
their shopping, States will bel
slow to impose more than nor
NAL sales taxes; if they do lay
heavy taxes on sales they will
also lay use taxes, with severe
penalties for evasion. Use taxes
are levies on goods purchased out
OF the jurisdiction.
1t seems likely that new sales
taxes will be imposed and pres |
ent ones often increased.
The sales tax is a lousy tax.
1t is costly to collect in that it !
is imposed on billions of trans
actions. requiring vast amounts
of records. forcing heavy ex-
oenses on the retailer. Checking
all collection points would cost !
more than the tax brings in, so
States use spot-check methods, |
which encourage cheating. No
one knows how much sales tax
revenue is knocked down before
States get their share. The tax
also restricts trade in a nation
whose prosperity depends on
sales.
But it has a great charm for
politicians - taxpayers don't
mind much because they pay
the taxes in pennies. Few ever
stop to reckon how much they
pay a year-or how much better
they could live if they were not
paying the tax. 1t hits corpora
tons lightly If at all. and the
rates don't increase for the rich:
thus it is popular with two i'm
portant sources for campaign
funds, corporations and the
wealthy.
Sales taxes are now levied in
SO States, besides 1872 political
subdivisions, according ~ Prem
tice-Hall. They are effective also
in the District Of Columbia, Ha-
wall and Alaska. Connecticut
had the highest rate OF 3.5 per
cent until October /, when a
half-cent flood-relief surcharge
ended. Now the honors 90 to
Washington, with 1888 per cent.
More State Income Levies
More States are expected to
impose income taxes. There
a good reason: The long term
prospect is for a reduction in
Federal income taxes and States
with their own income levies can
pick up the free" money i'm
mediately after Federal rates are
lowered. However. at present
any increases in State income
taxes are likely TO be small. Most
States do not want to drive in
comes 10 other States.
Auto. gas and oil taxes are
likely TO rise, first because auto
lists are getting more roads and
services. and. second, because
raising an existing tax creates
no new collection problem.
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