T*t RURAL NEW-YORKER 
1435 
A Primer of Economics 
By John J. Dillon 
Part LV 
SYSTEMS OF TAXATION—THE SAJ.ES TAX 
A sales or turnover tax is a tax on in¬ 
dustry. like the tariff, income, and commod¬ 
ity tax. Like the other forms of taxation, 
it has earnest advocates and determined 
opponents. The advocates of a sales tax 
are divided into two rather distinct 
schools, in the matter of practical means 
for putting the principle into effect. One 
of these schools would impose a sales tax 
at a low rate on all business transactions. 
The other would impose a heavier rate 
upon a limited number of business trans¬ 
actions. This school would impose the 
higher sales tax on the wholesale price 
of products manufactured or produced or 
imported when sold for consumption or 
use. The advocates in these different 
schools do not differ on the general prin¬ 
ciples of a sales tax.. Their difference 
seems to be one of expediency. Some ad¬ 
here to the extreme principle, while others 
arc willing to take what they can get. In 
a limited way we have some sales taxes 
now. Some States impose a sales tax on 
gasoline, and use the proceeds to build 
and repair roads. Our tax on convey¬ 
ances of real estate is virtually a tax on 
the sale. Our present tax on railroad and 
Pullman tickets and on theater tickets is 
a sales tax. So, too, is the tax on all 
sporting goods and on wearing apparel 
classed as luxuries a sales tax. Some of 
these taxes are paid in bulk by the manu¬ 
facturer or merchant. Others are paid by 
affixing a revenue stamp. In either case 
the buyer pays it in the retail price. 
United States Senator Smoot is the 
present leader in Congress of the sales- 
tax advocates. His proposed amendment 
to the 1021 revenue bill repealed some of 
the troublesome, hastily devised war taxes 
yielding a billion dollars of revenue, and 
provided for an equal amount of revenue 
in the following way: 
That in addition to all other taxes there 
shall be levied, assessed, collected and 
paid upon every commodity manufactured, 
or produced, when sold, leased, or licensed 
for consumption or use. without further 
process of manufacture, a tax equivalent 
to three per cent of the price for which 
such commodity is sold, leased, or li¬ 
censed ; such tax to be paid by the manu¬ 
facturer or producer. 
The amendment provided an exemption 
of all sales of less than $6,000 during one 
year. This is for the purpose of avoiding 
details of administration with small sales. 
This exemption would practically exempt 
all sales of farm products. The average 
value of the products of farms is esti¬ 
mated to be about $1,400. A large part 
of farm products are subjected to manu¬ 
facturing processes, and for that reason 
would be exempt under the definition of 
the tax in the biinoot amendment. The 
amendment was, however, defeated, and 
the present revenue law recently enacted 
does not contain a dcfiuite sales-tax 
feature. 
On May 19, 1920. the Dominion of 
Canada adopted a sales tax on the follow¬ 
ing basis: 
One per cent tax on sales and deliveries 
by manufacturers and wholesalers or job¬ 
bers. 
Two per cent on sales and deliveries 
by manufacturers to retailers or con¬ 
sumers. „ 
One per cent tax on the duty paid value 
of importations by manufacturers or 
wholesalers or jobbers. 
Two per cent tax on the duty paid 
value of importations by retailers or con- 
sum ers. 
This the Canadians call a tax at the 
source. Popularly it is called a painless 
tax, probably because it is paid in the 
price of the goods by the consumer with¬ 
out knowing it. It brought the Canadian 
Government $50,000,000. It proved so 
satisfactory that the rates have been about 
doubled for 1921 to relieve other forms 
of taxation. It is estimated that a simi¬ 
lar tax would yield $1,250,000,000 in the 
United States. Of course, the ultimate 
consumer pays it, as he pays most other 
taxes; but economy in collection is said to 
be a big gain. 
Many business and commercial organi¬ 
zations, including the Merchants’ Associa¬ 
tion of New York and individual business 
men, approve a sales tax, but were not 
satisfied with the Smoot amendment. Mr. 
Louis Ilolliugworth, a retired woolen 
manufacturer of Massachusetts and New 
York, has been an advocate of a general 
sales tax for many years. He has worked 
out a comprehensive and detailed plan, 
the striking feature of which is its sim¬ 
plicity. lie would impose a percentage 
tax on every sale, whether large or small, 
the same to all, whether rich or poor, high 
or low, to be collected by fixing a stamp 
to the bill or receipt. This stamp would 
be applied by the seller. There would be 
a stamp for sales of less than five cents, 
a stamp for five cents, and a stamp for 
10 cents, which would cost twice as much 
as the five-cent stamp, and so on in mul¬ 
tiples of five or 10 emits to cover the 
largest transactions. Of course, two five- 
cent stamps serve the purpose of one 10- 
cent stamp. The stamps would be fur- 
ni bed and sold by the Government as 
postage and revenue stamps are now sold. 
The stamp might be printed on a form 
that would serve as a bill for small sales, 
and no computation would be necessary at 
the time of sale. The stamp would show 
on its face the amount of the purchase. 
A bill of sale amounting to $100 would 
have a stamp marked $100 on the face 
of it. No matter what the amount of the 
bill, the stamp would show on its face the 
same amount in figures, thus: 
John Doe & Co. 
New York, Juue 1, 1921. 
William .Tones, Dr. 
To 1 overcoat.$30 
: U. S. Sales Tax : 
: $30 : 
: II. S. Sales Stamp : 
Gifts would be presented with a gift 
bill, requiring a stamp the same as a 
sales bill, except that gifts of $100 to 
any one person within the year might, be 
made without bill or stamp, to permit 
small church or social contributions and 
ordinary tipping, without the necessity of 
applying a stamp. Mr. Ilollingworth ad¬ 
vocates this form of tax for Federal, 
State, and local taxation. If one stamp 
only were to be used to provide revenue 
for all needs, then the different govern¬ 
ments would need to arrange for the pro¬ 
portion of the revenue to go to each. 
Otherwise each taxable realm should have 
a separate tax of its own. He suggests 
a one per cent tax on all sales, but the 
needed revenue could be raised by in¬ 
creasing or decreasing the rate. 
Penalties for evasions of the tax would 
permit either the seller or the buyer and 
the Government to collect the full amount 
of the bill as a penalty. In addition, 
sellers would be required to make verified 
monthly statements of the amount of their 
sales, and declarations that stamps had 
been applied as required by law. 
The merits claimed for this sales tax 
are that it treats every person, firm, and 
corporation, as well as every industry, 
exactly alike. It would not tax the money 
invested, but the business transacted. It 
would tax unproductive transactions as 
well as productive business, and non- 
essentials as well as essentials. It would 
cover inheritance. It would replace the 
onerous tax on business; call back to 
industry the capital that now seeks tax- 
exempt securities, and open the shops to 
men that are out of work. The tax would 
be automatically collected, and the ex¬ 
pense of collecting would be negligible. 
The salary and expense of the large array 
of men and women now required to col¬ 
lect taxes would be saved. The offices 
they occupy and the equipment and sup¬ 
plies they use would also be saved. The 
cost of collecting the Federal income tax 
is more than $10,000,000 annually. 
The sales tax has been proposed at this 
time to permit a reduction in the Federal 
income tax and to permit the repeal of the 
excess profits tax and the surtaxes. 
Friends of the sales tax claim that, be¬ 
cause of the large revenue it would bring 
from non-productive and non-essential 
sources, no tax need be levied on personal 
property, and the present tax on land and 
improvements would be reduced to one- 
half or one-fourth its present volume. 
Leaders in farm organizations have, how¬ 
ever, pretty generally opposed the tax on 
the ground that farmers would be obliged 
to pay the tax on their sales and would 
not be able to increase the price so as to 
pass the tax on to the consumer; but, on 
the other hand, dealers and manufacturers 
would be able to add the tax to the cost 
of farm supplies. Farmers would then 
pay the tax both ways. This is true, but 
it may be as true of the income tax, a 
commodity tax, or an import or tariff tax 
as it is of a sales tax. The provisions 
in the Smoot amendment to exempt the 
first $6,000 income any one year, and to 
exempt sales of raw products that go into 
manufacturing processes, but not the man¬ 
ufactured products, would practically re¬ 
lieve the farmer of the tax on sales. This 
is only just, because the farmer cannot 
make his own price for his goods and 
add the tax, as others can do, and the 
purpose is in no case to tax the raw 
material for manufacture. The farmer 
would pay his just share of the tax in the 
price of his supplies. If the sales tax 
would draw large revenue from sources 
that now escape, the farmer’s present bur¬ 
den may be lightened, in spite of the fact 
that he could not. like manufacturers, 
pass his sales tax on consumptive products 
along to the buyers or consumers of his 
products. 
There is no purpose here to plead for a 
sales tax or any other tax, but suspicion 
is justified when an unsupported state¬ 
ment is made that a given measure takes 
the burden off the rich and places it on 
the poor. We have yet to see the tax 
other than land tax that was not shifted 
by wealth to increase the burden of the 
masses, and we would like to see some 
figures to support the arguments and 
assertions on both sides of the sales-tax 
proposition. Neither side has presented 
such figures, and the truth is they cannot, 
because the census does not contain the 
necessary information, and we have been 
officially informed that the figures required 
are not available. Hence, the arguments 
are largely opinions based on the impei*- 
feet information at hand. It is not dif¬ 
ficult to estimate with practical exactness 
the proportion of sales tax to be paid by 
farmers; but we have no available data 
to show what he pays now under the 
present complicated and discriminating 
system. 
Marking a Sun Dial 
Will you tell us how to mark a sundial 
so as to have it accurate? J.K. 
The pointer, or stile, of a sundial, must 
be set accurately in the geographical me¬ 
ridian. For the determination of this 
meridian several methods are given in the 
text books, but the following appears to 
be the most practicable when a theodolite 
or transit instrument is not available. 
Set a table, accurately leveled, on the 
north side of and close to the dial. With 
the center of the dial as center describe 
several arcs or circles of different radii 
on the table. Suspend a plumbline over 
the dial so that the point of the bob will 
be exactly over the center. A small bead 
should be strung on the line and fixed at 
such a height that its shadow, cast by the 
sun, falls on the table. In the morning 
watch the shadow of the bead as it moves 
over the table and when it is exactly on 
one of the arcs, previously drawn, make 
a mark at the point. Mark also the point 
where the bead-shadow crosses the ynme 
are in the afternoon and draw a cord 
through the two points so marked. Then 
a line drawn through the point of bisec¬ 
tion of this cord and the center of the 
dial will be the meridian line. 
Now with a good watch set to local 
mean time and a table of the equation of 
time such as that given in the New York 
World Almanac under the heading “Sun 
on the Meridian of Washington,” the 
dial may be divided into hours and such 
parts of an hour as may be deemed desir¬ 
able. W. S. Kre'HELBERGER, 
Captain (Math.) IT. S. Navy, 
Director Nautical Almanac. 
a^k any 
vS. & B. ^Shipper 
A SK any S. & B. Shipper what 
he thinks of the S. & B. policy 
of fair treatment and highest prices. 
Hundreds ship year after year to 
S. & B. Headquarters because it 
MEANS MORE MONEY for their 
raw furs. 
Don’t fail to write for S. & B. pries 
lists and bulletins. It’s the one sure 
way to get top of the market prices 
for your catch. 
Send your name and address now! 
Don’t delay! Write now! 
STRUCK & BOSSAK, Inc. 
151 West 28th St. 
New York City 
TRAPPERS - DEALEI 
Write now for Geo. I. Fox accurate 
price list—this is another big 
fur year. Keep posted and 
make money. Our market 
reports and price list 
show you how and 
where to get 
more money 
for your 
furs. 
WE WANT 
ALLYOUR FURS 
Our hicrh trices, fair, hon¬ 
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Fox, Now York— Tho World’s Loading 
Fur Markot. Don’t delay, write now for 
market reports, price list, shipping tags. 
GEO.I.FOX.INC 
franrj.Mullercq 
jw[50WEST25 TH Sr 
V/ YTCOI 
NEW YORK^tf 
w 
jS 
V 5 
-V 
Wanted: 
Raw Fur Buyer 
We want a country raw fur buyer 
in every county of your state, to 
represent us this season. A. big op¬ 
portunity for those accepted. 
Write at once for our preposition. 
Charles S. Porter, Inc. 
126 W. 27th Street, New York City 
SKUNK 
We pay highest cash prices for 
all staple furs—Skunk, Mink, 
Muskrat, It a c coo n. Red Fox. 
Fancy furs a specialty, includ- 
_ing S i 1 ve r and <' l oss F o x, 
Fisher, Marten, etc. Est. 1870. 
Our continued prompt returns and liberal policy are 
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M. J. JEWETT & SONS, REDWOOD, N. Y. Dept. 29 
When yon write advertisers mention 
The Rural New-Yorker and you’ll get 
a quick reply and a “square deal.” See 
guarantee editorial page. 
IGuarantee 
Wo_»naranteo you will ha 
——————i——» ■— siittufled with our chock. 
_ | or wo will ship back your 
fcvery trapper knows that the place to I furs 
Ret highest prices is where they have - 
i 
Rei nignest prices is where they have -- 
experts assorting and grading. The fact that I grade every skin 
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FREE 
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Sol warenoff &. Co Inc. 
f 1 5 5 W^5 T "St 
N£W YORK CITY 
