Vagabond Editorials

(Continued from Page 7) widely used comrnodity. And never before in the history 1931 was just $70S. This year the average will be still of the world has one class of taxpayers contributed so gen- lower. What a tax ride thils motor car owner is being erally and generously to the cost of government. taken for!

At first it was universally conceded that the gasoline tax was a road tax, the motorist paying rent for the use of the highways. So well established became the use of gasoline tax moneys to highway building and maintenance, that any other use of such moneys became known as "Diver' sion." But Diversion soon caf,ne to play a very promihent part in the drama of gasoline taxation. The gas tax opportunity was a tax collector's dream come true-an apparently unlimited source of funds-a tax goose par excellence, yielding its feathers without squawking, and continuing to lay the golden eggs. So, in many states they got into the habit of diverting the road moriey to other uses, until today in various parts of the country the total annual amount of gas road tax money used for a wide variety of purposes far removed from road construction and upkeeping totds about $30,000,000, to which is now added the Federal one cent tax, which is entirely diverted from road use.

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How this gasoline tax grew! In 13 years it has yielded to the various states a total of fully $3,000,000,000. This year the gasoline tax income is approximately as follows: State tax, $550,000,000; Federal tax, $15o,000,000; total, $700,000,000. What a staggering sum ! Today, according to the best authorities, the average State and Federal tax on the national sale is about 5 bents per gallon; greater than the average wholesale price of the product, and double the average gross retail profit.

The highest taxed commodity on earth today, is gasoline. The highest taxed piece of property is a motor car. According to authorities, during the 13 years the gasoline tax has been placing in the public coffers $3,000,000,000, automobile taxes of all sorts have amounted to approximately $5,000,000,000. There are 27 different taxes upon the motor car, providing 12 per cent of the nation's total tax revenues, or about $2,000,000 per day. The average annual tax bill of the average motor car is computed to be $4E.38. Yet two-thirds of all the motor car owners in the United States have incomes under $3,000 a year. 93 per cent of all motor cars cost less than $1,000, and the average retail price of all the cars sold in the United States in

Adam Smith, the wise, in his "Wealth of Nations," said in 1776: "High taxes, sometimes by diminishing the consumption of taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes." That truth has been often demonstrated in every land and clime since that time.It is being well demonstrated in the gasoline industry today. As tax rates mounted above two cents a gallon (that seems to be about the level that can be levied without leaving room for illegal practice in manufacture and distribution) there cdme into existence the unnatural child of this legislation-gasoline tax evasion. As soon as the tax reaches a level that makes it more profitable to evade than to pay, the business of evasion starts. And with every notch upward the gas tax creeps, this monster grows. Today it permeates the entire oil industry, reaching its menacing, tentacles into every corner of the country, and in the states and districts where the tax is highest it takes on a boldness, an effrontery, a cunning and resourcefulness that has challenged the attention of the nation, stealing from the pockets of every taxpayer.

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Today the evasion of the gasoline tax has becqme a national racket of no small proportions. ft is estimated that last year at least $100,000,000 was stolen from State and Federal government tax coffers through this means alone. And as high gasoline taxes continue here, and increase there, the toll of evasion grows. Evasion is accomplished in a hundred cunning ways too nurnerous for description here. But you can be assured that for every ten gallons of gasoline that are sold legally and tax-paid in the United States today, at least one gallon is tax-evaded. And in some states, where the opportunities are greater because of conditions surrounding the industry, such as numerous sources of supply, etc., it is believed that for every five gallons sold legally, one gallon is sold illegally.

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It is the old law of too high taxes invoking the rule of diminishing returns. Many specific instances can be shown, where a state increases its gasoline tax-already highand immediately finds that by so doing it has decreased its income from gasoline taxes. As the tax mounts, P€ople stop using gasoline-on the one hand-and the evasion of the tax on the quantity used increases on the other. One of the states that raised the gasoline tax to the highest lirnit immediately found that it had a problem to face in handling bicycle traffic. People had taken to the pedals again. That too high gasoline taxes reduces motor car sale and use, and encourages lawlessness in evading the tax, there is no room for doubt. ***

In every state the gasoline tax money furnishes employment for a large number of people, building and maintaining the highways. When they raise the tax to an unreasonable level, people quit buying gasoline as much as possible, and the evaders increase by leaps and bounds. Thus the income from the gas tax is automatically reduced, and unemployment is the inevitable result. ***

This editorial is written to urge every loyal citizen to take an active interest in gasoline and automobile taxes, their uses and abuses. Only by the cooperation and assistance of good citizens can justice be had. Oppose a gasoline tax so high as to defeat its own purpose. Oppose any unwise diversion of this legitimate toll for use of the highways. And help destroy the evil of tax evasion by buying only gasoline on which you know the tax has been paid; and spread that gospel as you go. Urge your local

Newspaper To Keep

this matter before the minds of its readers'

Who gets hurt when tax-evaded gasoline is sold? First, the state and nation are deprived of the legal gas tax, and that gap has to be supplied by honest taxpayers in some other way. Second, the honest and legitimate gasoline dealer cannot exist when exposed to the cornpetition of tax-free gasoline, and he has to. get relief, go out of business, or turn .crooked and sell smuggled or blended fuel also. Third, the price structure of the oil industry is damaged by such unlawful competition. It must be apparent that the man who sells gasoline without paying the tax has a perfectly destructive advantage over those who operate their business legally. When the law assumes the right to assess a heavy tax on the sale of a commodity, that law and all those who hold law sacred assume the protection of those who pay those taxes and operate in respect for the law.It is the duty of every square-shooting, right-thinking citizen of this country to do everything in his power to destroy the evil of tax-evasion.

The awakening of public consciousness to the gasoline tax problem is one of the vital needs of the hour. The prevention of gasoline tax diversion should be an obligation; and the destruction of the racket of gasoline tax evasion should be a civic duty.