The Great Discount Day

Bargains at Tiffany's! The emporium that has seldom had a sale in its 128-year history closed its banklike doors for a day to reduce price tags on the 172,415 baubles in its stores in Manhattan, Houston, San Francisco and Beverly Hills. A 128-carat, inch-wide un-mounted diamond will be reduced from $1,000,000 to $900,000; a $4.50 silver key ring will drop to $4. These cuts --and millions of others across the U.S.-- were brought about by the repeal this week of most U.S. excise taxes and the reduction of others (see THE NATION). As the act went into effect with a sweep of the President's pen, it called for considerable effort on the part of business and caused a good deal of confusion for everyone.

One major problem is thai the reductions on some items are retroactive to May 15. Retailers not only will have to restamp many price tags but will have to recheck their inventories to determine when the goods arrived in their stores and whether they are entitled to refunds from wholesalers. Manufacturers claiming tax refunds from the Government will be required to submit lengthy forms to the Internal Revenue Service, detailing when they shipped their goods.

The 10% retail tax on jewelry, watches, furs, cosmetics and leather goods is gone. The reductions, however, will not be quite so generous for air conditioners, TV sets, typewriters, cameras and most other hard goods, which carried a tax that manufacturers paid directly to the Government. On a refrigerator that sells for $300 the reduction comes to $15--or only 5% of the actual retail price. A $500 color TV set will be trimmed about $30, and a $160 saxophone about $10. As for automobiles, this year's reduction will amount to 3% of the manufacturer's price--from $42.67 for a two-door Ford Falcon to $139.85 for a Lincoln Continental.

Many retailers promised to rebate the tax on big-ticket items that had been purchased within the last month --provided buyers kept their receipts. Some, however, planned no reductions at all for phonograph records, small appliances and other loss leaders that are already heavily discounted; and David Yunich, president of Macy's New York division, complained: "There are some manufacturers who are resisting passing on the excise-tax reductions to customers by contemplating raising their base prices." Whether they pass it on or not, businessmen were plainly pleased by the excise cut, figured that it would make more than small change at the cash registers.

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