Of "Everything"

Three idle newsmen were pitching pennies on the marble floor of a House Office Building hall outside the door of the Ways & Means Committee. On the other side of the door the committee, in executive session, was figuratively scratching its 24 heads over a billion-dollar tax bill. The cheery clink of coins on stone suddenly ceased when Harry Parker, the committee's grinning Negro messenger, opened the door and said, slowly: "Please, gen'men, will you-all stop that game? The sound of all that money annoys the gen'men."

Last week Secretary of the Treasury Ogden Livingston Mills made it his unpleasant duty to go before the Ways & Means Committee and announce that, in order to balance the 1933 budget, Congress must raise some $1,240,000,000 by new taxes instead of the $920,000,000 which he had estimated last November. Reason: a business upswing had not materialized as expected.

The problem flabbergasted the committee. How best to get the $1,240,000,000 out of a hard-pressed nation no man could state surely. Yet the necessity for balancing the Federal budget was self- evident. Upping the income tax to the 1924 level would bring in, according to the Treasury's revised estimate, only $134,000,000 more than the current amount. An automobile tax would add $100,000,000, amusement admissions another $110,000,000. A variety of miscellaneous levies would possibly produce some $200,000,000 more. But the total of all these did not put the Treasury within striking distance of a balanced budget.

Out of the committee's desperate search for new sources of revenue to bridge this six-or-seven-hundred million dollar gap arose last week a new and striking sentiment in favor of some form of

Sales Tax. Which is what? The present tax on cigarets is a sales tax. But what the term is more often used to mean is a tax on everything bought & sold, or a tax on everything with certain specified exceptions. Essentially the jdea of a sales tax is to put on thousands of articles so small a tax that no one will notice it, rather than to load the burden on a few articles or on a few sources such as personal income.

Heretofore, good though such a levy might be in theory for distributing the cost of Government, it was generally viewed as a political impossibility. The only organized and articulate advocacy of such a levy came from Publisher William Randolph Hearst who sent a large Congressional delegation to study Canada's 4% sales tax. Against a sales tax the ordinary U. S. politician, chiefly interested in people as voters, cries out on the ground that: 1) it would burden the poor man proportionally more than the rich man; 2) it would be costly to collect; 3) no tradition for it exists in the U. S. Chief objectors to a sales tax have been the Democratic leaders now in control of the House.

Without any specific drive, without any organized propaganda, the sales tax idea has been creeping closer and closer to the Ways & Means Committee until last week, seven members were assigned to study it as a revenue possibility. Excise taxes proposed for this or that industry were in each case protested as discriminatory. Taxes on luxuries were too small to be really helpful. But to tax every retail transaction is cumbersome. Therefore the committee pondered a tax on all manufactured articles at the factory. It was estimated that the current value of manufactured goods approximated $40,000,000,000 per year. A 2% tax on this production at the factory would bring the Treasury a fat $800,000,000, which would speedily bridge the awful chasm of Deficit.

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