Needed: A Sales Tax?

Before the Senate Finance Committee last week appeared Cincinnati's John F. Lebor, representing some 1,000,000 members of the American Retail Federation and the Retail Industry Committee. His group had once opposed a national retail sales tax because they thought it would hurt their business. But now, Lebor told the committee, which is considering the pending tax bill (TIME, June 25), retailers want Congress to pass a retail sales tax. They think it would hurt them--and the rest of business--less than the sky-high corporate and individual rates in the pending bill. The new rates proposed under the House bill, said Lebor, would raise corporate taxes 30% above the high levels of World War II.

Tax Expert M. L. Seidman of the New York Board of Trade put that organization on record for a retail sales tax. Such a broad and uniform tax, said Seidman, would merely restore some balance to the U.S. tax system, now top-heavy with individual and corporate income taxes, which have shot up much faster than excise taxes. Under the proposed new bill, said he, direct income taxes taken altogether would constitute "83% of net budgeted receipts compared with 78% last year and 50% in 1939 . . . Under this new 'fair deal' ... a man reaches the zenith of his financial success in life when he can retain $23,502.50 out of an $80,000 income. After that he can keep a nickel out of every dollar." The National Association of Manufacturers also plumped for a sales tax (of some 20%), but applied at the manufacturers', not the retail level.

The Finance Committee indicated its hostility to all sales-tax proposals. But with a 1953 budget estimated at $80 to $90 billion, and with almost every other source of revenue already tapped to the utmost, it looked as if the argument for a national sales tax had just started.

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