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THE
REVIEW
fflJJIC TIRADE
VOL LXXII. No. 17
T
Published Erery Saturday by Edward Lyman BUI, Inc., at 373 4th Ave., New York.
April 23, 1921
1 H E introduction in the Senate last week by Senator Smoot, of Utah, of a Revenue Bill to be known as
"The Sales Tax Act, 1921," which provides among other things for the repeal of Section (904 of the
War Revenue Bill and therefore the elimination of excise taxes on musical instruments, offers to the
members of the music industry a definite sales tax measure upon which to concentrate their support.
Up to the present time the Music Industries Chamber of Commerce and the allied interests have been
working in support of some form of commodity sales tax that would bring in the required revenue without
necessitating the continuance of excise taxes on musical instruments. This course was strongly recommended
in the report made by the Legal Committee of the Chamber, but no particular sales tax plan was favored so long
as the one finally decided upon granted the desired relief to this industry.
Now comes Senator Smoot, who has always proven a strong friend of the music industry, with a bill
that, to revert to the vernacular, is just what the doctor ordered. It provides for a definite tax upon sales, and
just as definitely repeals the existing excise taxes on musical instruments and some other products.
The introduction of such a bill into the Senate is significant, for although the House of Representatives
is flooded with such measures, with the majority of Congressmen setting forth their individual ideas, the Senate
is called upon to consider only a limited number of bills and therefore has greater opportunity for giving
the proper amount of thought to such legislation.
The industry has rallied for the tax fight with remarkable energy, and there is no question about it hav-
ing gone strongly on record with the members of the Ways and Means Committee of the House and of the
Finance Committee of the Senate as favoring a sales tax and being opposed to a continuation of excise taxes.
The work that has been put into the tax campaign so far has not in any sense been wasted—in fact, it should
prove of tremendous value in lending support to the Smoot bill.
There is a strong movement on foot in certain quarters to quash bills providing for a sales tax, some of
the opponents going so far as to declare that wealthy business interests have raised a substantial fund for the
purpose of supporting such a tax and placing the burden on the shoulders of the poor consumer. The opponents
lose sight of the fact that every known tax, in this country at least, has been paid and will be paid by the ulti-
mate consumer—by the poor as well as the rich. The present excise taxes are paid by the final purchaser, who
must also bear the heavy expense of computing such taxes and providing reserves for their payment.
In view of the opposition, the industry cannot rest content in the thought that, Senator Smoot having in-
troduced his bill, the rest is clear sailing. There will be a multitude of House bills which will find their way into
the Senate, and there is very likely to be strong opposition to the Smoot bill itself as. at present constituted. The
measure, while providing relief for the music industry, does not prove so favorable for some other industries,
and the protest over this fact is likely to be loud and long.
As the work of drafting and passing a final new tax measure proceeds and the time for such action draws
nearer it behooves the members of this industry to redouble their efforts and see to it that any measure that is
finally passed puts the question of taxation on a basis that is fair and equitable and that the burdens under which
the music trade has labored for several years shall have been definitely removed.
Under existing conditions, the excise tax itself, although only five per cent, in many cases may be taken
to represent the difference between profit and loss. It comes close to being a case of fighting for continued busi-
ness existence. This point must not be overlooked by those who have the interest of the trade at heart, as the
immediate future of the industry will be greatly affected by the nature of the tax laws finally passed by the
lawmakers in Washington. Individual members of the trade, manufacturers and dealers alike, should bend
every effort to secure the support of Senator Smoot's bill by the various members of the legislative bodies, and
should do all in their power to create public sentiment in favor of this proposed plan of equitable taxation.