Excise Taxes

June 4, 1949

Report Outline
Congress, the Administration, and Taxes
Rates and Yield of Federal Excise Taxes
Excise Taxation in Theory and Practice
Special Focus

Congress, the Administration, and Taxes

Relaxation of the postwar economic boom has increased demands that Congress give business and consumers long-delayed relief from the burden of war excise taxes. Although income taxes on individuals and corporations have been cut substantially since the end of the war, there has been no corresponding action in the field of excise taxation. Canada recently repealed a number of its war excises and reduced others, but in the United States the wartime taxes and wartime rates are still in full force and effect. Many of those excises were imposed at high rates during the war for the specific purpose of discouraging civilian consumption or use of the articles and services affected. By the same token, it is now contended that modification of such levies would stimulate lagging business and help to prevent a drop in the government's overall tax receipts.

Although there appears little likelihood that Congress will take up any general tax measure before adjournment of the present session, the subject of excise levies will have an airing if the Senate acts on a House-passed bill to repeal the special taxes on oleomargarine. For Sen. Johnson (D., Colo.) may be expected to offer as a rider to that bill an amendment, for which he unsuccessfully sought Senate Finance Committee approval in April, to cut the rates of some of the war excises. President Truman is still asking for a $4 billion tax increase to avert a deficit and provide funds for reduction of the public debt in the fiscal year beginning July 1. Congress has shown extreme reluctance to accede to that request. But if it is forced to raise income tax rates, at the next if not at the present session, it will no doubt try to make such increases palatable by acting at the same time to reduce or eliminate the more onerous of the war excises.

Excise Tax Burdens and the Decline of Business

The question of possible excise tax revision was raised by uncontradicted reports, May 9, that the Council of Economic Advisers had recently suggested to the President, not only that he revise downward the $4 billion goal for new tax revenue which he had set in his January budget message, but that he consider also a reduction in those war excises which basically affect business operations and which are comparatively small revenue producers. In its Annual Economic Review last January the Council, while proposing increases in taxes on corporate profits and personal incomes, had asserted that “Consideration should also be given to reductions or abandonment of some excise taxes and increases of others.”

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Mar. 19, 1953  Federal-State Tax Relations
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Nov. 03, 1950  Excess Profits Tax
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Aug. 29, 1947  Taxation of Family Income
Apr. 09, 1947  Income Tax Relief
Jan. 11, 1946  Taxation of Cooperatives
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Sep. 20, 1943  Sales Taxes
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Jan. 11, 1941  Exemptions from Taxation
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Nov. 27, 1934  Elimination of Conflicts in Taxation
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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
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Jan. 16, 1926  Taxation of Estates and Inheritances
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Federal Taxes