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Mr. Speaker, under leave to extend my remarks in the Record, I include an article on the much mooted subject of tax sales, sponsored by the Tax Relief Association of California. The article is timely, in view of the fact that taxes are constantly mounting and new sources of public revenues sought by tax-levying and tax-spending bodies. The sales tax has such a subtle appeal that those who seek ways to pick the pockets of the poor never cease urging it as a quick and easy method to provide public revenues. The following article is worthy of careful perusal:

In California, as well as in other States, there are sales taxes, the general rate in California being 3 percent. To this tax the only exception affects foodstuffs sold in grocery stores, restaurant foods paying the tax. It is our desire to sum up in a few words the arguments in favor of or against the imposition of a sales tax. The arguments in favor of it we shall arrange by stating the proposition and giving the answer. ARGUMENTS IN FAVOR OF THE SALES TAX It is equal because rich and poor pay like sums. Answer: Only superficially has this argument any foundation. The rich pay their taxes out of the superfluous income and without depriving themselves of the use of a single necessity. The poor paying the tax deprive themselves in the course of a year of the purchase of many articles of ordinary comfort and necessity. The money they pay may prevent them from purchasing needed clothing or furniture or books or other articles. In no direct sense, therefore, is the sales tax equal because of taxing on the same 3 percent basis. The sales tax means little in many individual instances. Answer: The statement is only correct as to those who have an income beyond the personal necessities. All estimates show that the average sales tax paid by the poorest stratum of society amounts to about $8 per year. In these instances the sum so paid will be anywhere from 1 day to 1 week of hard labor for which the laborer receives no compensation from the State. This is true even in tens of thousands of instances and it cannot be argued in truth that the sales tax means little in individual cases. Everybody should contribute to the support of the Government and the sales tax is the appropriate method of enforcing contributions. Answer: Everybody does today contribute to the support of the country. Aside from the numberless taxes entering into the production of the simplest article (in the case of bread it is estimated to amount to no less than 50 percent) one pays his contribution to the support of the Government when he pays as he does, his rent. The sales tax is the only way to make visitors pay towards the support of the government which they enjoy. Answer: Like all others in any given State, the visitor, during the stay, pays for the support of the government in the rent as well as in the case of individuals in the indirect taxes on whatever they consume. The sales tax relieves real estate. Answer: The question arises what one means by real estate as well as with what should be relieved. If by real estate we mean land values, then they should not be relieved from taxation on any pretext. They are the product of the society which is gathered together under the State, and being such common product may be taken for public use as extensively as the State may see fit. If we include improvements under the heading of real estate, that should be exempted from taxation because all taxes upon them interfere with the production of useful articles, and this would keep men out of work. The argument, however, in favor of relief of real estate is made by people who want land values not to be taxed and vigorously resist every attempt to exempt improvements. The sales tax supports the public schools. Answer: This statement is absolutely without foundation. The sales tax contributes largely to the general fund which supports the public schools. To the schools it can make no difference if the general fund is obtained from the sales tax or from a general tax upon land values, which is what would happen if we were free of the sales tax. Any attempt to say the sales tax is essential to the support of the schools is unsustainable and in this connection we refer to the report made by Dr. Elmer H. Staffelbach, in August, 1933. After protesting very vigorously against the sales tax and charging that its institution came from the "vested interests," he says, "Now we find ourselves in this year of our Lord 1933 reverting to a policy which was in force 150 years ago and which required a revolution to overthrow - a tax system which taxes the people who can least afford to pay and they can do least to avoid it." The sales tax costs little to collect. Answer: At the present time in California about $2,000,000 is expended to collect a sales tax yielding around eighty to ninety million. If, instead of a sales tax, a tax were imposed on land values and collected by the county tax collector with the other taxes, the cost of collection would be a trifle. For the luxury of collecting a sales tax, the State pays today, therefore, without adequate return, $2,000,000 per annum. The poorer element of society, having the largest number of children, should pay a sales tax as a proper return for the benefits conferred upon them by the schools. Answer: This argument loses sight entirely of the purpose for which schools were created. The fundamental idea is to build up citizens useful to the whole community and is not primarily based upon the benefit to the individual. The soundness of this contention is illustrated by the result; where the best education is furnished to the child, there the land values reflect the worth of the citizen. In a broad sense we see it in the different States of the Union. Where education is neglected, land values are low; where education is perfected, land values are high. ARGUMENTS AGAINST THE SALES TAX While these arguments are many, we shall refer to a few of them, reverting at times to some of those we have already stated. The sales tax compels the poorer strata to work for the Government from 1 day to 1 week per annum for which no compensation is paid. The sales tax makes a crime of the innocent act of buying or, if not a crime, a hindrance. The purchaser should not be compelled to pay for the privilege of purchasing, an act innocent in itself and beneficial to everybody. When we expose individuals to such a tax we are infringing upon a natural, fundamental, and elemental right. The sales tax imposes upon the merchant. It requires him to keep unnecessary books and to be subject to annoying and vexing visitations from tax officers. The sales tax diminishes sales and products. When a man deducts a sales tax he finds himself less able to buy; the merchant sells less; the manufacturer produces less; the laborer has less work to do or is deprived of employment entirely. There can be no doubt that it puts thousands of people out of work in California. The sales tax operates unequally as between the poor and the rich. We have discussed this in our answer to the argument in favor of the sales tax. The sales tax is contrary to enlightened economic opinion. This opinion is well illustrated by the report of the special Committee on Tax Policy to Adjust Economic Recovery and Permanent Prosperity. The committee includes a number of the most distinguished economists in the country. Among the recommendations is the following: "Personal property taxes, which are administratively unsatisfactory, and general sales and poll taxes, which are regressive in nature and therefore constitute an unfair burden on the poorer classes, should be abolished as speedily as possible." In the further discussion of the subject they say, "General sales or poll taxes bear no relation to ability to pay but are instead extremely regressive in character and cannot be justified on the ground of equity. General sales taxes,. are, moreover, repressive in their effect upon business, as they tend to diminish buying and to drive business across State lines. They fall with unequal effect upon different business enterprises." CONCLUSION In view of the foregoing, it is submitted that the California sales tax should be abolished as speedily as may be. This in the interest of the vast majority of our citizens. TAX RELIEF ASSOCIATION OF CALIFORNIA, NOAH D. ALPER, General Executive Secretary