39 



of us are concerned about. We agree with the ends. We just don't 

 agree with the means. Thank you for your time and attention. 



[Statement of Mr. Peri may be found at end of hearing.] 



Mr. Saxton. Thank you very much. I am tempted to ask Ms. 

 Steed if she got up at five o'clock in the morning to help her neigh- 

 bor to work, and I think I will pass on Mr. Dufficy's wildlife photos. 

 Thank you all for your testimony. It is very enlightening. 



Some of you are involved in the business as Mr. Peri is as a rep- 

 resentative of manufacturers or wholesalers or retailers, and with- 

 out repeating the little scenario of how this tax could build from 

 $2.50 on a pair of boots to an expensive $10 on a pair of boots, 

 would any of you care to comment? That is certainly one concern 

 that I have foremost in my mind. 



Mr. Peri. Well, Mr. Chairman, I will comment. I mean, it is 

 something that we are very concerned about. We are a small manu- 

 facturing company. Our margins are not a full keystone, which is 

 the name often given to the description that you gave of how that 

 markup works. 



The retailers that we work with also do not get a full keystone 

 markup, in that they do not mark it up 100 percent. But I will say 

 that we have had a recent experience that is taking place right 

 now, as we speak, that the bank that we normally borrow our 

 money from was sold to another bank. Wells Fargo. And they have 

 decided that outdoor businesses are not anything they want to be 

 loaning money to because the margins are simply not good enough. 



I might point out that we hope for less than a full keystone 

 markup under the best circumstances, and we realize substantially 

 less than that. We are very concerned that we are already operat- 

 ing in a very difficult competitive environment. 



We compete with many products that are made offshore — very 

 less expensive products. Ours are considered a premium at this 

 point — particularly for videographers. We have a pack that is often 

 used by TV — professional camera crews, and we have lumbar packs 

 that are used by emergency medical technicians. And if I was the 

 administrator of a hospital and had to choose between purchasing 

 a pack that was sold by a medical supply house and, therefore, was 

 never considered an outdoor pack and our product that has outdoor 

 connotations, that multiplication factor of four — even if it wasn't 

 multiplied, that tax would make a difference. And we feel that we 

 would be at a competitive disadvantage and would lose sales. 



Mr. Saxton. Thank you. 



Mr. LuciER. Mr. Chairman, I might want to address this quickly 

 more from the standpoint of tax policy and public choice theory. It 

 is simply bad tax policy on any grounds. The five percent excise tax 

 level is fairly similar to say the seven percent excise tax in Canada, 

 and which used to be called the Manufacturer's Sale Tax (MST). 

 Now, it is called the Goods and Services Tax (GST). 



And once you have a tax like this in place, you are going to see 

 abuse of it. For instance, the Clinton gas tax — 4.3 percent on the 

 gallon. Does that go to roads? No. It goes to general spending. The 

 Administration has just proposed a tuition tax credit. How do they 

 fund that? A user fee on leaving from airports — a $6 departure tax. 



Once this tax is in place and you have the idea of collecting a 

 sort of a general user fee/excise tax for whatever purposes may be 



