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BOW WILLIAMS etc A utomobile and General Insurance Budget Payment Plan Strong Stock Companies 624 LAMAR, AUSTIN GReenwood 2-0545 Let’s Abolish the Poll Tax! TMA FOR A SALES TAX Senate Rejects Ralph’s Tax Cuts Texas companies and would be passed on to the public in higher prices. Furthermore, he said. the federal government already taxes corporations. He said the present state tax structure was attracting industry to Texas and cited the case of one company which he said had been considering locating in Arkansas but changed to Texas. Burris said a general sales tax, already widely used in other states, is one of the “most stable” sources of revenue “if levied on all final retail sales.” As for a state personal income tax, Burris said, the federal government is collecting some $1.3 billion from Texans, and if a state income tax is enacted, it “most assuredly” should not be a graduated tax. A manufacturers excise or gross receipts tax would place Texas firms at a competitive disadvantage with those in other states, Burris said , and would tend to be passed on to consumers multiplied by wholesale and retail mark-ups, resulting in a steep increase in the price of manufacturer products to the buyer. Burris advocated a “broader based” tax structure. The sales tax, he said, is .broad based and “visible” to the taxpayer. “If large numbers of people who vote pay no taxes or fail to realize that they do pay taxes in the price of goods purchased, there is a tendency for them to demand services for which the rest cannot afford to pay or ought not in justice be asked to pay,” he said. No Sales Tax Johnorm_ secretary of the HarTa,s County Democratic executive committee and candidate for the state legislature, introduced himself as a taxpayer. Opposing a general ,sales tax, Johnston said that between 40 and 50 per cent of taxes raised in Texas come from direct sales taxes now. As examples, he listed the gasoline tax, which he said was much too high already, taxes on sales, on cosmetics “including such things as baby oil and baby on theater admissions, on radio powder,” on playing cards, cigarettes, alcoholic beverages, and au Member of the Piano’ Technicians Guild, Inc. Douglas R. Strong PIANO TECHNICIAN Tuning, Repairing, Rebuilding JAckson 3-1276 808 Harold, Houston 6, Texas tomobile sales. Other direct taxes on consumers or users, or which are passed on to the users, he said, are poll taxes, car licenses increased ten per cent this year hunting and fishing licenses, and gross receipts taxes such as those on gas and electric utilities and telephones. All these taxes are levied without regard to the ability to pay, and the state’s tax structure seems “very broad based, indeed,” Johnston said, since all the people are paying heavily, and industry is paying relatively small percentages. This statement brought a retort from Rep. Frates Seeligson of San Antonio, millionaire member of the tax study commission, who told Johnston that a `cbroad base” referred to the “type” of taxation rather than to the number of people or groups paying the tax In reply to Burris, Johnston said that a tax on the net profits of corporations couldn’t very well be passed on to the consumer, since it would be calculated on the net figure after all costs were subtracted; therefore, any price increase in the year following would only have the effect of raising the net profit then to be taxed. The sales tax is an inconvenient tax, Johnston said, and it can, and usually does, result in a lavy on consumers much greater than the tax per cent levied, since retailers usually collect the tax on all items above a specified minimum price. Cross-Fire In West Virginia, Johnston said, the tax starts at six cents, although it is a two per cent tax. Thus, when a consumer buys a ten-cent item, he has to pay eleven cents, which amounts to a ten per cent instead of a two per cent tax on that item. When a customer buys a 50-cent item he pays 52 cents, or a four per cent tax on such an item. Some retailers, said Johnston, “inadvertently” keep the difference for themselves when they pay the tax to the state. Burris, Johnston said, was looking at the tax structure from the standpoint of a lure to get industry to locate in Texas, but there was another way to look at it: “If the people of Texas are saddled with a three per cent sales tax, then their purchasing power would be decreased by three per cent.” There are some corporations which operate in Texas, using Texas resources and labor, but their profits go out of the state THE TEXAS OBSERVER Page 4 March 21, 1958 and are not taxed here, Johnston said. Seeligson challenged Johnston’s figure of 40 to 50 per cent. Seeligson said the actual amount of the taxes raised by selective sales taxes cited by Johnston “was only 29 per cent” of all state taxes. Johnston said later that Seeligson apparently did not include gross receipts taxes, such as taxes on utilities, to which he referred. utilities, to which he referred. \(Seeligson’s 29 percent figure may also have come from the Texas Research League’s computations of “state-local taxes,” which include taxes paid at the local John McKee, secretary of the commission, demanded to know if Johnston advocated taxing corporations just for the sake of taxing corporations. Johnston replied that he did not advocate any unnecessary taxes. Poor Man’s Drink Leonard said the beer business is fading business. “To a discouraging degree we are being priced out of the market by high` taxes, high wages, and high cost of materials. This is what taxes have done to one industry in Texas.” The state tax on beer of $4.30 a barrel is 66 per cent higher than the national average, he said, and this has gone up 247 per cent while state sales taxes on gasoline have gone up 25 per cent, on cigarettes 66 per cent, and all other products only ten per cent. Along with the federal tax of $9 a barrel, direct taxes on beer account for 48.5 per cent of the value of each barrel produced, and this does not take into account franchise a n d property taxes, Leonard said. Sales and profits of breweries in Texas have been declining; there were ten breweries in the state shortly after repeal, but now there are only six, and the number of wholesale dealers is steadily going down, he said. Beer is “the poor man’s drink,” he said. The jobs of 150,000 workers are at stake in what is happening to the industry. Thirtythree states have lower taxes on beer than Texas, he said, BULLY! HOUSTON A little-noticed witness at the Texas tax study coinmission’s hearing in Houston was Joseph McFarland, representing a cash register company. He said his firm could supply to retailers cash registers that will record the amount of a retail sales tax separately as a purchase is rung up. WASHINGTON Sen. Ralph Yarborough, bucking both the administration and Sen. Lyndon Johnson’s Senate leadership. saw the Senate reject his bill to cut taxes to ease the “galloping recession” by an increase of $200 in individual income tax exemptions. The vote was 64-19. He said ‘his proposal would save taxpayers some $3.75 billion during the rest of 1958. He is for more public works, he said, but his tax cut would more immediately within 30 dayspump cash into the pockets of consumers and the cash registers of small businesses. “The great group of people in the lower income brackets or middle income brackets … are the ones who will end the depression. A few rich people cannot end the depression. It is necessary to have purchasing power in the hands of the masses of the people,” Yarborough said. The amendment was opposed in debate by Sens. Clark and Neuberger, Democrats, and Capehart and Allott, Republicans, among others. Neuberger said he could not be fore more public works and tax cuts at the sane time. Yarborough said his amendment was conservativethat a liberal amendment on the matter would provide for a $10 billion tax cut. When a Republican said tax cut talk is “talking politically,” Yarborough responded: “It is wholly immaterial to me whether someone says it is politics. I do not fall for cliches: I am wholly unintimidated by the Madison Avenue approach to government. … This proposal is sound economics.” Co-sponsoring the amendment were Sens. Proxmire, Morse, Pastore, and Murray. Also voting for it were Carroll, Douglas, Gore, Green, Hill, Jackson, Johnston of S. C., Langer, Long, Magnuson, Mansfield, McNamara, Scott, and Sparkman. Johnson voted no. JOHNSON, MEANTIME, in a broadcast to Texans, said the federal government must take immediate steps to find jobs for between five and six million unemployed: “We need to take action that will put people to work quickly. The way to do that is to speed up projects which Congress already has approved and for which funds have been appropriated. That is the kind of action I had in mind when I introduced in the Senate two resolutions calling for stepped-up effort in building civil works and military construction projects.” Johnson said funds appropriated for such ,projects “are being spent at the present time on the basis of a normal economy. But there is nothing normal about an economy which cannot find jobs for five to six million willing workers. … We ought to go ahead with these authorized projects on a full speed basis.” Johnson said it had been “one of the most productive and constructive weeks I have ever observed since I became a member of the Senate.” He said the new housing bill passed by the Senate \(both Johnson and Yarborsome 750,000 new jobs. An additional 400,000 or 500,000 new jobs will result, Johnson said, from final passage of the two resolutions he rammed through the Senate for a speed-up in federal public works. Yarborough was among cosponsors of the bill to strike from the new housing bill the GOP-proposed increase in interest rate on GI guaranteed mortgages from 4.5 to 4.75 percent and on military housing mortgages from 4 to 4.5 percent. The higher interest rates were approved when the amendment failed, 47-47, with Yarborough and Johnson voting for it. The two Texas senators also voted for an amendment that U.S. loans should not exceed 4.5 percent in interest charges. This was defeated, 45-43. Johnson and Yarborough also voted for an adopted resolution freezing farm price supports at not less than 1957 levels. Agriculture Secretary Benson says this will probably be vetoed. The administration is moving, Yarborough charged, to lower farm prices. “A wrong decision here,” he said, “will mean that thousands of more farm families will be moved off their land. They want the people to move into town to join the army of unemployed.” He called for an antiEzra Taft Benson alliance “of all senators from the farm states.” Appearing before the Senate committee on labor and public welfare \(of which he is the junagainst the administration-proposed federal withdrawal of support for vocational agriculture programs. “There is no place in the educational scheme of America to cut out highly successful educational programs,” he said. REPUBLICAN Rep. Bruce Alger of Dallas told a Dallas meeting of the Society of Automotive Engineers: “A free economy cannot guarantee everyone work. That is socialism, . even communism.. A free people must have the right not to work. This does not mean a right to starve.” Alger added that public officials are “unduly alarmed” about the current state of the economy: “It is none of their business to make the government the source of employment for everyone If a WPA were created, the people put to work would not be those unemployed. Primarily, the work would go to contractors who already have work.” Alger voted against what he said was a $1.4 billion federal boondoggle: the 1958 rivers and harbors authorization bill. In so doing, the Dallas Republican voted against the spentling in Texas of a total $9.4 million in Teas reclamation projects. including a $4.4 dam at Harlingen and a $5 million dam and irrigation system at San Angelo. Rep. George Mahon of Colorado City, chairman of the powerful House subcommittee handling defense funds, warned against a Pentagon “spending spree,” saying, “we want to make it clear that we do not want an inordinate spending and contracting spree that will throw programs out of balance and produce confusion, waste and chaos in what is of, necessity a very intricate, expensive and difficult business. a spending spree in order merely to give industry a shot in the arm and reduce unemployment rolls would be a sad mistake …” COMPLETE INSURANCE SERVICE HALL’S WIGINTON-HALL LEAGUE CITY INSURANCE AGENCY INSURANCE AGENCY INSURANCE AGENCY Dickinson, Texas Alvin, Texas League City, Texts