sid as se 708 us! Mr. SORRELL. You mean the cost to me? Mr. BATES. Yes, sir. mately one-tenth in Maryland. was approximately-before this last raise that the oil companies gave Mr. SORRELL. The cost to the consumer? The cost to the consumer Mr. SORRELL. It was 22 in the District, and 23 and approxiMr. BATES Perhaps, you do not understand me; perhaps, we do not understand each other. The Maryland Legislature increased the gasoMr. BATES. Well, what was the cost to the consumer in Maryland Mr. SORRELL. Two weeks ago, approximately 2 weeks ago. then, and what was it here? Have you changed gasoline costs here in the District within the last month or so? Mr. SORRELL. Yes; I have. I increased it 1 cent per gallon. Mr. BATES. That is because of the increase by line tax when? Mr. BATES. So, today it is 24.1 in Maryland, and 23.1 in the District. Mr. SORRELL. That is correct. Mr. SORRELL. By the oil companies. Mr. BATES. And the gas tax is 2 cents greater? Mr. SORRELL. I believe you will find that true of a lot of stations close to the metropolitan area. Mr. BATES. Well, thank you very much, Mr. Sorrell. Mr. SORRELL. Thank you. Mr. BATES. The next witness on our list is Mr. Horner. STATEMENT OF STANLEY H. HORNER, REPRESENTING THE WASHINGTON AUTOMOTIVE TRADES ASSOCIATION, WASHINGTON, D. C. Mr. HORNER. Good morning, Mr. Chairman. I am Stanley H. Horner, and I represent the Washington Automotive Trades Association, an organization of retail automobile dealers engaged in business in the District of Columbia. The servicing, repairing, and selling of used and new cars is one of Washington's largest industries. One of the most important assets to the future of this industry is good highways and streets, adequate to handle the traffic needs of our customers. Realizing this, we have always advocated good roads and streets. We realize, too, that these facilities cost money, and are paid for by those who use them. But we further realize that any unnecessary increase in the automotive taxes that our customers pay will jeopardize the business potential of our industry which, squeezed to the breaking point during the war, is just beginning to recoup its normal operations. Prior to the war the bottleneck in our business was keeping our used cars moving. Once our supply of new cars catches up with the present demand we will again be confronted with this problem. The market for used cars prior to the war existed among the lower income groups, and it is this group that feels the pinch of high automotive operating costs, a large part of which is contributed to by present taxes. A United States Department of Commerce survey, made before Pearl Harbor, revealed that 60 percent of all automobile owners earned less than $30 a week. While this figure may not hold true today, we do know that the operating costs of used car owners has gone so high that they will be priced out of the market. The situation regarding the new-car market today is this: Eight months ago the automobile dealers of the country had the most fantastic backlog of orders, both as to number of units and dollar volume, ever recorded in the peacetime history of any product. This backlog no longer exists. Instead, cash deals in the automobile business have come to a virtual standstill, and hundreds of thousands of orders have been canceled-even the credit orders. The responsibility for this turn of events can be placed squarely on several factors which combine to make new-car ownership almost untenable for the average-income family in these days of inflationary spirals and high living costs. This can be attributed to the original retail price of the car, the subsequent upkeep, the tax outlay at the time of purchase, license fees, and the high gasoline taxes imposed by Federal, State, and local units of government. Leading economists are predicting flatly that this combination of factors will cause every segment of the industry, manufacturer, distributor, retailer, and servicemen to suffer business reverses in the very near future. Something should be said here of the taxes being paid by purchasers of new cars. I think the simplest way to say it is by telling you that before the purchaser can shift gears on his new car he has to pay out an average of $90.71 in special taxes. Of this amount $70 represents the average excise tax collected by the Federal Government, tires and tubes account for another $4.50, and the District of Columbia charges another $16.21 to register it. But that is only the beginning as far as taxes are concerned. The minute the new-car owner buys his first gasoline he starts paying more taxes, 3 cents to the District on every gallon and 112 cents to the Federal Government. The average Washington motorist consumed 950 gallons of gasoline in the last year for which official figures are available, and which costs him $42.75 in taxes alone. This brings the total automobile tax bill to $135.46 in the first year of operation. And that is the picture that must be faced by the individual citizen if he intends to own a new car. As previously indicated, the Automotive Trades Association is intensely interested in seeing our Capital City carry on with its highway and street-development program. We believe that during this period of high construction costs and scarcities in personnel, material, and equipment that there is a serious doubt that the Highway Department can spend the very substantial sum available for new construction. The Federal Aid Highway Act of 1944 authorized for appropriation to the District government the sum of $8,922,000. Only a small proportion has been spent and almost 2 years of this Federal highwayaid program has gone by. Mr. SORRELL. You mean the cost to me? Mr. BATES. No; the cost to the consumer. Mr. SORRELL. The cost to the consumer? The cost to the consumer was approximately-before this last raise that the oil companies gave us? Mr. BATES. Yes, sir. Mr. SORRELL. It was 2210 in the District, and 23 and approximately one-tenth in Maryland. Mr. BATES Perhaps, you do not understand me; perhaps, we do not understand each other. The Maryland Legislature increased the gasoline tax when? Mr. SORRELL. Two weeks ago, approximately 2 weeks ago. Mr. BATES. Well, what was the cost to the consumer in Maryland then, and what was it here? Have you changed gasoline costs here in the District within the last month or so? Mr. SORRELL. Yes; I have. I increased it 1 cent per gallon. Mr. SORRELL. By the oil companies. Mr. BATES. So, today it is 24.1 in Maryland, and 23.1 in the District. Mr. SORRELL. That is correct. Mr. BATES. And the gas tax is 2 cents greater? Mr. SORRELL. I believe you will find that true of a lot of stations close to the metropolitan area. Mr. BATES. Well, thank you very much, Mr. Sorrell. Mr. SORRELL. Thank you. Mr. BATES. The next witness on our list is Mr. Horner. STATEMENT OF STANLEY H. HORNER, REPRESENTING THE WASHINGTON AUTOMOTIVE TRADES ASSOCIATION, WASHINGTON, D. C. Mr. HORNER. Good morning, Mr. Chairman. I am Stanley H. Horner, and I represent the Washington Automotive Trades Association, an organization of retail automobile dealers engaged in business in the District of Columbia. The servicing, repairing, and selling of used and new cars is one of Washington's largest industries. One of the most important assets to the future of this industry is good highways and streets, adequate to handle the traffic needs of our customers. Realizing this, we have always advocated good roads and streets. We realize, too, that these facilities cost money, and are paid for by those who use them. But we further realize that any unnecessary increase in the automotive taxes that our customers pay will jeopardize the business potential of our industry which, squeezed to the breaking point during the war, is just beginning to recoup its normal operations. Prior to the war the bottleneck in our business was keeping our used cars moving. Once our supply of new cars catches up with the present demand we will again be confronted with this problem. The market for used cars prior to the war existed among the lower income groups, and it is this group that feels the pinch of high automotive operating costs, a large part of which is contributed to by present taxes. A United States Department of Commerce survey, made before Pearl Harbor, revealed that 60 percent of all automobile owners earned less than $30 a week. While this figure may not hold true today, we do know that the operating costs of used car owners has gone so high that they will be priced out of the market. The situation regarding the new-car market today is this: Eight months ago the automobile dealers of the country had the most fantastic backlog of orders, both as to number of units and dollar volume, ever recorded in the peacetime history of any product. This backlog no longer exists. Instead, cash deals in the automobile business have come to a virtual standstill, and hundreds of thousands of orders have been canceled-even the credit orders. The responsibility for this turn of events can be placed squarely on several factors which combine to make new-car ownership almost untenable for the average-income family in these days of inflationary spirals and high living costs. This can be attributed to the original retail price of the car, the subsequent upkeep, the tax outlay at the time of purchase, license fees, and the high gasoline taxes imposed by Federal, State, and local units of government. Leading economists are predicting flatly that this combination of factors will cause every segment of the industry, manufacturer, distributor, retailer, and servicemen to suffer business reverses in the very near future. Something should be said here of the taxes being paid by purchasers of new cars. I think the simplest way to say it is by telling you that before the purchaser can shift gears on his new car he has to pay out an average of $90.71 in special taxes. Of this amount $70 represents the average excise tax collected by the Federal Government, tires and tubes account for another $4.50, and the District of Columbia charges another $16.21 to register it. But that is only the beginning as far as taxes are concerned. The minute the new-car owner buys his first gasoline he starts paying more taxes, 3 cents to the District on every gallon and 112 cents to the Federal Government. The average Washington motorist consumed 950 gallons of gasoline in the last year for which official figures are available, and which costs him $42.75 in taxes alone. This brings the total automobile tax bill to $135.46 in the first year of operation. And that is the picture that must be faced by the individual citizen if he intends to own a new car. As previously indicated, the Automotive Trades Association is intensely interested in seeing our Capital City carry on with its highway and street-development program. We believe that during this period of high construction costs and scarcities in personnel, material, and equipment that there is a serious doubt that the Highway Department can spend the very substantial sum available for new construction. The Federal Aid Highway Act of 1944 authorized for appropriation to the District government the sum of $8,922,000. Only a small proportion has been spent and almost 2 years of this Federal highwayaid program has gone by. There is also a mistaken idea that the Federal Congress appropriates funds to the District for the maintenance and construction of the streets, highways, and bridges. Other than the aid authorized in the Federal Aid Highway Act of 1944, the highway users in the District of Columbia pay the entire cost of the streets, highways, and bridges in the District. Twenty-seven thousand men and women are employed by the automotive trades in the District of Columbia. Of the private industry employees in the District, 1 out of every 12 is engaged in some activity connected with the automotive trades. An increase in the gasoline tax would have an adverse effect on the economic welfare of these employees and their families. Not only is this true of these individuals and their families, but of all private enterprises in the city which depend upon the motor vehicle for conducting normal business functions. Motor transportation can move forward only when it is unhampered by burdensome and discriminatory taxes. Private industry in the Nation's capital is flourishing under the influence of automobiles and trucks. Motor vehicle registration is continually increasing, and more revenue is being received from the gasoline tax every month. There is every indication that this trend will continue for some time, and that the District of Columbia will receive more and more taxes from the highway users. For these many reasons, we consider it unwise to increase the gasoline tax, and further, that the request of the District government for the increase represents taxation without justification. We urge this committee to turn down this demand as unwarranted and unnecessary. Thank you, sir. Mr. BATES. You represent the garage owners, too, Mr. Horner? Mr. HORNER. No, sir; we are primarily new and used car dealersprimarily new cars, but all of us are saddled with used cars in connection with our new ones. Mr. BATES. Well, with the background of experience that you have had in that field, would you say that much of the repair work necessary on cars in the District is a direct result of congestion, bad streets, continuous stopping and starting of the automobiles by inexperienced drivers which had multiplied their costs of operation, where if they had continuous operation, better streets, underpasses, and so forth, the cost to them would be much less and would more than offset this increase in gas? Mr. HORNER. Mr. Chairman, I think that— Mr. BATES. What is your reaction to that? Mr. HORNER. I think that the inexperienced operators of automobiles cause a lot of trouble regardless of where they operate. I do not think that the streets have anything to do with the number of accidents that are caused by inexperienced people. Mr. BATES. Well, they may have years of experience and still do not know how to drive a car; those were the types I had in mind. Mr. HORNER. Yes, sir; you will find that existing every day. Mr. BATES. Have you examined this program of the Highway Department? |