Federal Taxes on Consumption

April 17, 1936

Report Outline
Prospective Revision of House Tax Bill by the Senate
Proportionate Burden of Direct and Indirect Taxes
Farm Processing Taxes and the Federal Revenues
General Sales Tax as Alternative Revenue Source
Special Focus

Prospective Revision of House Tax Bill by the Senate

The New Tax Bill framed by the Ways and Means Committee in response to the request for additional revenues made by President Roosevelt on March 3, 1936, is expected to be reported to the House of Representatives within the next few days and to be passed by that body after comparatively brief debate. It is estimated that the measure in its present form would produce $799,000,000 in the first year and $591,000,000 each year thereafter. The President asked for 792,000.000 annually for three years and $620,000,000 thereafter. Speaker Byrns predicted on April 13 that the Chief Executive would insist that sufficient new taxes be provided to restore the budget to the position it occupied before invalidation of the Agricultural Adjustment Act and passage of the bill for immediate payment of the bonus. It was thought, however, that the task of rewriting the tax bill to accomplish that objective would be left to the Senate.

Failure of the Ways and Means Committee to approve the President's suggestion that new processing taxes be levied at low rates on a broad list of agricultural commodities is chiefly responsible for the revenue deficiencies of the pending measure. It is now believed that there is more than an even chance that the Senate Finance Committee will revive that proposal, that the Senate itself will consent, and that the House will finally accept the change. The difficulty of finding other adequate sources of revenue not politically objectionable lends support to this view.

Consumption Taxes vs. Higher Personal Income Taxes

It has been said that the Senate Finance Committee will consider as a substitute for new processing taxes an upward revision of individual income taxes. Early in March the Treasury gave estimates on several proposals of this nature as alternatives to the suggestions contained in the President's message. It stated that by lowering the exemptions for single persons from $1,000 to $800 and for married persons from $2,500 to $2,000, an additional revenue of $45,000,000 could be obtained. An increase in the rate of the normal tax from 4 to 6 per cent was estimated to yield $121,000,000. A reduction of the surtax exemption from $4,000 to $3,000, accompanied by a sharp increase in surtax rates up to the $100,000 bracket, was estimated, moreover, to yield $226,000,000, while a combination of all these proposals was counted upon to produce $446,000,000.

ISSUE TRACKER for Related Reports
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Mar. 26, 1969  Tax Reform Pressures
Mar. 24, 1965  Excise Tax Cuts and the Economy
Feb. 15, 1961  Flexible Taxation
Apr. 02, 1959  State Tax Problems
Apr. 23, 1958  Tax Reduction, 1958
Aug. 14, 1957  Fast Tax Write-Offs
Apr. 10, 1957  Federal Payments in Lieu of Taxes
Sep. 12, 1956  Corporation Profits and Taxes in Prosperity
Mar. 16, 1954  Shares in Tax Relief
Nov. 21, 1953  Revision of Excise Taxes
Mar. 19, 1953  Federal-State Tax Relations
Oct. 01, 1952  European Taxes and Tax Evasion
Nov. 03, 1950  Excess Profits Tax
Feb. 01, 1950  Tax Loopholes
Jun. 04, 1949  Excise Taxes
Oct. 27, 1948  Postwar Sales Taxes
Aug. 29, 1947  Taxation of Family Income
Apr. 09, 1947  Income Tax Relief
Jan. 11, 1946  Taxation of Cooperatives
Oct. 16, 1945  Federal Taxes on Business
May 08, 1944  Postwar Taxes
Sep. 20, 1943  Sales Taxes
Dec. 05, 1941  New Taxes for Defense
Apr. 05, 1941  Taxation for National Defense
Feb. 28, 1941  Taxation of Alcoholic Beverages
Jan. 11, 1941  Exemptions from Taxation
Dec. 04, 1940  Federal Taxes and Defense Financing
Feb. 01, 1940  Sharing of Tax Revenues
Feb. 02, 1939  Turnover Taxes in the States
Nov. 05, 1937  Broadening of the Income-Tax Base
Jun. 17, 1937  Exemptions from Income Taxation
Apr. 05, 1937  Coordination of Federal and State Tax Systems
Dec. 19, 1936  Revision of Federal Tax on Capital Gains
Nov. 02, 1936  State Taxation of Natural Resources
May 26, 1936  Assessment of Property for Taxation
Apr. 17, 1936  Federal Taxes on Consumption
Mar. 19, 1936  Taxation of Undistributed Corporate Profits
Dec. 17, 1935  Reduction of Tax Burdens on Real Estate
Oct. 21, 1935  Tax Delinquency in the United States
May 21, 1935  Comparative Tax Burdens in America and Britain
Feb. 01, 1935  Federal Taxation of Corporations
Nov. 27, 1934  Elimination of Conflicts in Taxation
Jul. 25, 1933  Taxation of Excess Profits
Jan. 25, 1933  Tax Burdens and Tax-Free Securities
Nov. 23, 1932  The Beer Tax and the Sales Tax
Dec. 19, 1931  Sales Taxes: Federal, State, and Foreign
Sep. 18, 1931  Death Taxes and the Concentration of Wealth
Mar. 18, 1931  Federal Taxation of Large Incomes
Jan. 10, 1931  Taxation of Capital Gains
Nov. 09, 1929  Federal Tax Reduction-1930
Aug. 08, 1927  Federal Tax Reduction—1928
Sep. 27, 1926  Tax Reduction and the Public Debt
Jan. 16, 1926  Taxation of Estates and Inheritances
Nov. 07, 1925  Federal Taxation of Small Incomes
Nov. 28, 1924  Social, Fiscal and Legal Aspects of the Inheritance Tax
Apr. 07, 1924  Causes and Effects of the Tax Return Blockade
Dec. 12, 1923  Tax Exempt Securities
Dec. 10, 1923  Taxation
Federal Taxes