V.sabond Editorials

By Jack Dionne

In a recent issue we devoted this column to a discussion of panics. That discussion brought one of the greatest kick-backs this department has ever known. In this issue let us talk about the next most important matter before the public today-most vitally interesting to every business man-TAXATION.

NOT the general subject of taxes. Heaven forbid that I attempt that in this space. But rather a specific taxthe biggest thing in the tax line the world has yet knowna rnodern miracle that most of us should understand yet know very little about; GASOLINE TAXES. you drive up to a gasoline service station, buy your gas, pay for it, and then drive off without considering the amazing background to the transaction you have just been a party to. For when you paid for your gasoline, you not only paid for that motor fuel, but you likewise paid the State and Federal tax on that gas. And THAT shall be the subject of this effort at an educational discussion.

What is this gasoline tax? Whence comes it? For what is it used?. How is it abused? What does it mean to you and f, to our government and the support thereof? Do you know? You should! Few things are more vitally important. Every man who owns and operates a gasoline consuming vehicle is vitally interested in this subject. Likewise every taxpayer.

Generations ago England, seeking new means of paying the continually rising cost of Government (it being universally understood that men make and must therefore support Government), discovered that Holland was paying expenses in very satisfactory style with a new and unique type of taxation called an "excise." So England adopted it. And we inherited it from England. We first used it on tobacco products, and later spread it in all directions.

It was not universally popular in the beginning, for we read in the famous "Dictionary" of Doctor Johnson in England, this definition of the excise tax: ,,A hateful tax, levied upon commodities, and adjudged, not by the common. judges of property, but by wretches hired by those to whom excise is paid." History says that they tried through the courts to force Doctor Johnson to change that definition; but he never did. The Supreme Court of the United States refers to excise tax as an.impost on ..importation, consumption, manufacture, and sale of commodities; privileges, particular transactions, vocations, occupations, etc." Our gasoline tax is an excise tax, and its use has spread in this country as it did in England, until today it fairly dwarfs into insignificancg all other forms of taxation. And the greatest of these is the rnotor car and motor fuel taxes. :f*{.

The gasoline tax was first suggestd officially in this country on December 7, 1915, when president Woodrow Wilson, personally addressing Congress on the emergencies of the war we were then entering, and suggesting ways and means for raising additional funds for war financing, urged a one cent per gallou Federal tax on gasoline, declaring that ten millions of dollars might be raised annually in that way. Little did the president know that he was then establishing the foundation for the most momentous tax gathering idea the world has ever known. *:t*

In l9l8 a gasoline tax was rnentioned in the first draft of the Federal budget, but did not appear in the final draft. But in 1919 the State of Oregon, having the vision to see the huge asset a system of modern highways would be, decided to finance the building of such highways within her borders by the imposition of a one cent per gallon state gasoline tax. And thus a most momentous ball was started rolling. Oregon specified that the gas tax was to be used exclusively for road building and maintenance. The idea followed in the wake of the old toll roads and bridges of early days, built by private means, and charging the toll for their use to those who passed over. The new gasoline tax was designed as a road toll on the rnotorists passing over. ***

The germ was not long in spreading. Three other states followed that same year. By lgZl fifteen states had gas tax laws. Rapidly, all the states and the District of Co_ lumbia followed suit, and passed gasoline tax laws to build and maintain the highways. Allof them started with one cent per gallon assessments. ft was not until 1926 that the ante was raised above one cent per gallon.

But just as naturally as State by State they decided to assess a gasoline tax, so did they later decide, as tax hunger developed in the various state legislatures, that a horse that could carry a one cent load so easily, might just as well carry two. The lamp of Aladdin and the touch of Midas seemed exemplified in our modern life by this magic wand of tax wealth that had suddenly appeared.

With the rapid development and distribution of the motor car came the need and demand for more and better roads; and with this latter came the need for the money to build and finance those roads. The gasoline tax was "a natural." It was certain to come, and did come. But the size and importance to which it has grown in thirteen years, staggers the imagination. For today every state in the union has a gasoline tax, and the lowest is two cents per gallon . Ilere are the figures: 4 states have a 2 cent per gallon tax:. 12 states have a 3 cent per gallon tax; L7 states have a 4 cent per gallon tax; 9 states have a 5 cent per gallon tax; 5 states have a 6 cent per gallon tax;2 states have a 7 cent per gallon tax (this list includes the District of Columbia).

In addition various cities and communities in many states have taken it upon themselves to impose their own special gasoline taxes; and in I93Z the Federal Government imposed a one cent per gallon tax on gasoline; so that today in no state is the gasoline tax paid by the motorist less than 3 cents, and it ranges from that to as high as 11 cents in certain communities. Mobile, Alabama, furnishes an excellent example of what burdens of taxation can be placed upon a long-suffering commodity. In Mobile the wholesale gasoline license costs $500; the wholesale lubricating license is 9250; the filling station license is $25; the city license on each gasoline pump is $S5; the state and county license on each gasoline pump is $50; the state gasoline tax is 5 cents per gallon; the city tax is 1 cent per gallon; the sea-wall tax is l7/2 cents per gallon; the Federal gas tax is 1 cent per gallon; making a total of 8rl cents per gallon gas t:rx on top of the huge license fees.-

***

The system universally employed in taxing gasoline is what is known as the barn-yard theory of taxation; we pluck the most feathers from the bird that squawks the least. The burdens piled and piled up on the gasoline business with so little "squawking" that our lawmakers just heaped iton. No other tax in history ever increased so rapidly in rate and in total of revenue. Never before had any government discovered an opportunity to make so much in revenue from one legitimatg necessary, and

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