Governors' Conference

When governors meet, high talk of State's Rights is inevitable. Much such talk was heard last week in Salt Lake City where 23 Governors and seven Governors' proxies were assembled for what has become an annual meeting. State's Rights in public domain, in prison-made labor, in Prohibition enforcement were the themes. Governor Franklin Delano Roosevelt of New York, who always tries to have something new and notable to say, shifted the talk to Federal Responsibility--made a speech to the effect that the U. S. must some day soon provide unemployment insurance for its citizens.

A subject more compelling and newsworthy was the State Sales Tax, as discussed by Governors Lamartine Griffin Hardman of Georgia and William G. Conley of West Virginia.

These men's States, and Pennsylvania, have experimented with gross sales levies upon producers, wholesale houses and the like. Many a State taxes retail sales on specific commodities to obtain funds for specific purposes, viz, the gasoline tax for road maintenance. The Governors of Georgia and West Virginia did not favor a general retail tax, exemplified by existing law in Kentucky. They talked about taxes on gross sales as a means of obtaining almost the entire revenue of a State.

West Virginia's Conley, initiator of the subject, praised the gross sales tax for its flexibility. He said: "The method of its application can make it take on the color and character of an income tax, of a depletion tax, of a consumption tax, of a production tax." He decried the net income tax as "penalizing efficient management."

Georgia's Hardman quoted from tax return tables to show how small were individual taxes on the gross sales of any one business.

Minnesota's Governor Theodore Christianson, Iowa's Governor John Hammill, Nebraska's Governor Arthur J. Weaver thought well of the scheme, asked many a question. Chief question: how to keep State legislatures from adding the gross sales tax to other burdens, instead of substituting it for them?

Reed Smoot, chairman of the Senate Finance Committee, in Salt Lake City last week to be married (see p. 61), commented on the Governor's discussion: "The sales tax is inevitable. It's one of the fairest forms of taxation we have available."

Fair, too, was Governor Conley, the tax's chief advocate. He presented the arguments against the sales tax. As his State applies it, he said it "falls on the thrifty and efficient and on the shiftless equally" it is difficult to fix equitable rates on different classes of taxpayers; it falls on consumption and thereby on necessities; it does not distinguish between extractive and mobile industries (West Virginia coal mining companies particularly chafe under it).

This file is automatically generated by a robot program, so reader's discretion is required.