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Mr. KEARNS. But as to the various owners of automobiles in the State, in the cities, towns, or villages, I have never heard an owner even inquire about the tax on automobiles.

Mr. MITTENDORF. I beg to differ with you on that, Mr. Kearns, because in our State it is a very live subject, I assure you.

Mr. KEARNS. It is in your organization?

Mr. MITTENDORF. In our organization.

Mr. KEARNS. Yes; I know it is. But so far as the owners are concerned, I have not heard one of them, except in these meetings, ever mention the tax.

Mr. MITTENDORF. The motorists of Ohio last year paid altogether, or they will pay this year, about $30,000,000 in taxes, including the gasoline tax, registration tax, tax on trucks, and things of that kind, not including the personal-property tax, which we estimate to be about $10,000,000 in addition.

Mr. KEARNS. Is your organization against the gasoline tax?

Mr. MITTENDORF. Our organization went on record not against the 2-cent gasoline tax but against an increase. The last general assembly increased the gasoline tax to 3 cents.

Mr. TREADWAY. Is not the general assembly supposed to represent the people locally?

Mr. MITTENDORF. They are supposed to represent them; that is their duty, I am sure.

Mr. TREADWAY. They must have acted for the people of the State in voting on the gasoline tax.

Mr. MITTENDORF. They probably interpreted the wishes of the people that way; they sometimes interpret them wrong.

Mr. TREADWAY. Are you advocating the removal of the gasoline tax?

Mr. MITTENDORF. We are on record against an increase in the gasoline tax.

Mr. KEARNS. At the beginning you were against the 2-cent gasoline tax?

Mr. MITTENDORF. No.

Mr. KEARNS. Is not that the one which the governor vetoed, the 2-cent gasoline tax?

Mr. MITTENDORF. He did not veto that, that I remember.

Mr. KEARNS. Which one did he veto?

Mr. MITTENDORF. Which gasoline tax-I do not think the governor vetoed the gasoline tax.

Mr. KEARNS. Oh, yes; he did, and it was passed over his veto. It could not say whether it was the 3-cent tax or the 2-cent tax, but according to my recollection it was the 2-cent tax that he first vetoed. Then they passed it over his veto and finally raised the tax to 3 cents. Mr. MITTENDORF. I do not recall the governor's vetoing the gasoline

tax.

Mr. KEARNS. You do not recall that?

Mr. MITTENDORF. No.

STATEMENT OF H. A. MELDRUM, BUFFALO, N. Y., REPRESENTING THE NEW YORK STATE AUTOMOBILE ASSOCIATION

Mr. MELDRUM. Mr. Chairman and gentlemen of the committee, I am here as president of the New York State Automobile Association, representing 93 clubs with about 80,000 members.

The amount of money paid by the people of the State of New York for this particular tax last year was $5,200,000.

The New York State Automobile Association, at its convention in Rochester last month, went on record unanimously against the continuation of this tax. This action is similar to that taken the last three years.

Mr. TREADWAY. Did the convention you speak of take into consideration the general subject of raising the Federal revenue, or did it consider merely the removal of this one tax?

Mr. MELDRUM. It simply considered the removal of this tax.

Mr. TREADWAY. Without regard to where the Government might make up the difference in revenue?

Mr. MELDRUM. Exactly.

STATEMENT OF CHARLES M. HAYES, CHICAGO, ILL., REPRESENTING THE CHICAGO MOTOR CLUB

Mr. HAYES. Mr. Chairman and gentlemen, I represent the Chicago Motor Club. We also have in the State of Illinois what is known as the Affiliated Clubs of Illinois, with a total membership of approximately 100,000 automobile owners.

The question of excise taxes has been discussed by the boards of directors of these organizations for quite some time. It is the consensus of opinion that in view of the fact that this tax has been levied for all these years, since the close of the war, we are quite within the bounds of propriety in requesting that you consider seriously the elimination of the tax.

You know just as well as I do that the motorists of America are paying a tremendous premium for the privilege of driving automobiles, and we believe that it will serve the workingman, the wage earner, to remove this tax. We feel it will be no inconvenience to the Government in its program of financing, or in the economic problem, when you take off the excise tax on automobiles and accessories.

I believe I voice the opinion of a great majority of the motorists of Illinois in asking that you give serious consideration to our request in connection with this particular problem, and we will appreciate it very much if you will give us the relief we ask for.

Mr. CRISP. I would like to state to the witness that I agree with him that automobiles are very heavily taxed. In my own State of Georgia we pay an ad valorem tax on the value of the car to the municipality and to the State; we then pay a license fee, an operating fee, and a 4-cent gasoline tax.

STATEMENT OF HON. GRANT M, HUDSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. HUDSON. Mr. Chairman, I thank you for the courtesy, but I do not care to take 15 minutes.

I have a statement I would like to file with the committee. Mr. HAWLEY. Without objection, I will be printed in the record. (The statement referred to will be found at the conclusion of Mr. Hudson's remarks.)

Mr. HUDSON. I will simply take a moment to touch on one or two things which have been brought out as I have sat here and listened to the statements of the witnesses who have appeared before you, and also by the statement filed with the committee by the Secretary of the Treasury.

Gentlemen of the committee, it is assumed by everybody that there is to be a reduction in the total amount of Federal taxes levied. If that is true, the tax should be removed from the articles taxed by Federal taxation where they will give the greatest relief and serve the greatest justice to the people.

There is not one item in the reduction of Federal taxes that will accommodate as many citizens of the United States as the removal of the automobile-excise tax. There is no tax in the list of the Federal taxes that is so unjust in its application as the Federal motor tax, because you are taking one class of citizens and putting a Federal tax burden upon them, and on one industry, as compared with all the other persons and all the other industries.

The other thing that I want to put into the record is this, and I think I am fairly accurate in these figures: When some member of the committee asked a question as to what the railroads pay in Federal taxes, I think if you will go back you will find the report showed it was somewhere in the neighborhood of $385,000,000. That shows that clearly to-day under Federal, State, and municipal taxes the motorist is paying a larger portion.

Mr. OLDFIELD. About twice as much, according to the figures?

Mr. HUDSON. Yes. Then there is another thing I want to take just a moment to discuss. I do not want to take very much of the committee's time because I want to give the time to these men who are here from the various States representing the various angles of this question. But I want to bring out this one issue that seems to present itself to me this morning, and that I think the committee ought to consider very carefully.

The great reason, it seems to me, why we should remove this last vestige of these excise taxes is this: There never has been a question, so far as the committee is concerned, but what you placed the tax there as a measure of raising war revenue. In response to that, the motorist has paid his share. The figures showing this to be the case I have placed in the brief which I am filing at this time.

If you continue this excise tax on the motorists, and on the automobile industry, indirectly, you are going to establish the policy of making a sales tax a part of the system of the Federal Government for raising revenue. Are you ready to make that the policy of the Federal Government? If so, you will soon have to extend it. You must put a Federal tax upon pianos, upon radios, upon Victrolas; you must put a Federal tax upon shoes, upon the clothes you wear, and on the food you eat. If we are to establish the policy of a sales tax for raising Federal revenue we shall need to extend and not lessen its application, and such a policy should not be inaugurated, to my mind, without full discussion through some months in order that the people as a whole may understand the purpose. To take one item under the schedule of excise tax and make that a permanent tax, thus inaugurating a Federal sales tax, to my mind, is both unfair and unwise at this time.

Mr. GARNER. You know, Mr. Congressman, there is considerable thought in this country, which may have been reflected in the Treasury Department, advocating a sales tax to take the place of these so-called high surtaxes and high taxes on corporations at the present time. The Secretary of the Treasury said he did not want this base narrowed. I tried to press him on that point, to find out whether he wanted it to be broadened, but he declined to say he wanted it broadened in that way.

Mr. HUDSON. That is true, but if the principle is to be established, and it is intended to have a sales tax, you have begun it if you continue this tax I am referring to.

Mr. OLDFIELD. Senator Smoot predicted two or three years ago that a general sales tax would come in this country.

Mr. GARNER. And the Treasury Department says, having gotten this little hold on a sales tax, that they want to hold it as a principle, so they can extend it somewhere else."

Mr. HUDSON. Then they ought to be frank, if this is no longer to be kept as an excise tax, but is a new policy to be established.

Mr. OLDFIELD. You will recall, probably, that a great publisher of newspapers sent a trainload of Members of Congress to Canada some time ago to study the workings of the sales tax there and see if they could not establish a sales tax in this country. But they did not do

that.

Mr. HUDSON. No.

Mr. GARNER. The Treasury Department urges that the major portion of the taxes to be reduced at this time should be applied to the reduction of the corporation taxes, and they say the limit of reduction should be $225,000,000. If the theory is to be carried out that the limitation is to be $225,000,000, and the major portion of that is to be applied to corporation taxes, maybe there will not be room enough to get in the automobile tax.

Mr. HUDSON. I will say in reply to that that the removal of corporation taxes, or a portion of them, ought to be done. But I am saying this to you, that your first duty is the removal of taxes that bear upon the individual taxpayer in order to lighten his burden rather than upon corporations who pass on the tax.

Mr. GARNER. What is your opinion about the limitation of reduction?

Mr. HUDSON. I am not here to tell the committee about that. I have a personal opinion on that matter.

Mr. GARNER. You might express that. People are expressing their personal opinions here.

Mr. HUDSON. I would say $300,000,000 would be proper, within that figure, or possibly $350,000,000. I do not think the country would suffer or that we would have deficit.

Mr. TREADWAY. Would you prefer that the automobile owner benefit directly rather than the corporation or the manufacturer of the automobile?

Mr. HUDSON. The corporation or the manufacturer of the automobile, to my mind, under this tax, is very remotely concerned.

Mr. TREADWAY. Do you say that the company is very remotely concerned?

Mr. HUDSON. Yes; the industry is remotely concerned.

Mr. TREADWAY. But they seem to be very much in favor of its removal.

Mr. HUDSON. They are because they pass it on to the individual purchaser of the car, and it would be a little cheaper.

Mr. TREADWAY. And you take the position that the tax on the individual is a hardship.

Mr. HUDSON. I do.

Mr. TREADWAY. Have you known of any prospective automobile purchaser refusing to buy a car on account of the tax?

Mr. HUDSON. The average tax is something over $18 to the average buyer of an automobile. That does not enter into it seriously to the wealthy man. We are not here for him, but for the man who is to-day compelled to vacate his farm because he can not get the implements and machinery at proper cost to run his farm. This represents one of the added costs, because he must have an automobile.

Mr. TREADWAY. As a rule, that man buys a cheaper car, does he not?

Mr. HUDSON. Yes, sir; but the tax is the same in proportion.

Mr. TREADWAY. Do you believe that there is a difference of position between the man you are pleading for and the so-called wealthy man in the matter of the hardship in paying the tax?

Mr. HUDSON. Yes.

Mr. TREADWAY. Suppose now you put yourself in the position of this committee for a moment: You are advocating the removal of one particular tax, and you and your associates have made a very strong appeal, but each one I have heard has been speaking with regard only to this one tax. Now, we sit here with regard to all the taxes. I will ask you to assume for the moment that there should be some of the automobile tax removed as a result of the action of the committee: If you were making that change, would you apply the reduction to all of them or would you prefer a graduated reduction, varying with the price of the car?

Mr. HUDSON. No.

Mr. TREADWAY. So in that case you are not looking after the poor man, but you are looking after the wealthy as well as the poor?

Mr. HUDSON. No; I said that we were here pleading for the individual taxpayers rather than the industry represented by the corporations. That was in reply to the suggested reduction of the tax on the corporations. Now, if you take into consideration the added expense of making the graduated tax, the added expense that would be imposed upon the manufacturers of the cars and upon the Government, it seems to me that it would not be practical. Therefore, if you are going to retain any tax upon motorists, do not make it a graduated tax based on the cost of the car. They do that in the States.

Mr. TREADWAY. What is your opinion as to the gasoline tax?
Mr. HUDSON. I do not see that that enters into it.

Mr. TREADWAY. Yes; it does enter into comparison, because in advocating this reduction there was held up here a placard for a moment showing $700,000,000 in automobile taxes, one-eighth of which was levied by the Federal Government. These other taxes that you are complaining about do enter into the picture.

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