Postwar Sales Taxes

Report Outline
Postwar Spread of Retail Sales Taxes
State Experience with Sales Taxes
Proliferation of Local Sales Taxes
Sales Tax as a Source of Federal Revenue
Special Focus

Postwar Spread of Retail Sales Taxes

The general sales tax has made impressive gains since World War II. Four new states instituted general sales taxes as a permanent part of their revenue systems in 1947, bringing the total number of American states now collecting such taxes to 27. Wisconsin will vote on a sales tax in connection with the November election. Local taxes on retail sales have been accepted as a device for raising needed revenue by more than 100 American communities during the last four years. The states which collect general sales taxes themselves, or have recently authorized their local communities to do so, have a combined population of 102.5 million, or 73.3 per cent of the population of the United States.

No proposal for a national levy on retail sales has been advanced during the present campaign, but Chairman McGrath of the Democratic National Committee asserts that Republican leaders in Congress have “elaborate plans to enact a federal sales tax if they should win in November.” And Gov. Dewey has been challenged by Sen. Barkley, Democratic candidate for vice president, to tell the country whether G.O.P. plans “contemplate the levy of a general sales tax by the federal government in addition to those now levied by the states.”

Types of Sales Taxes in the United States

Taxes on sales of specific commodities and services have long been levied at all levels of government in the United States. The 52 categories of federal excise taxes bring in nearly one-fifth of the total revenues of the national government; most of these taxes are levied on manufacturers but are paid by consumers. In each of the 48 states, taxes on gasoline, tobacco, alcoholic beverages or other commodities are important revenue producers. Similar taxes on the same commodities are now levied by many cities.