Tax Cuts

Across the U.S. last week, prices were trimmed to reflect the $999 million cut in excise taxes. Westinghouse reduced refrigerator prices as much as $22.95 and electric ranges as much as $20.78. Sears, Roebuck cut its hard-goods prices (e.g., a freezer, from $299.95 to $284.95). General Electric cut some appliances, and Eastman Kodak announced that it would make cuts that in some cases would" exceed the 10% manufacturers' tax. Admiral, Philco, Hotpoint, Norge, Whirlpool Corp., Deepfreeze Appliance, Crosley, Servel, Frigidaire, Nash-Kelvinator and Bendix all announced that they will pass tax reductions along to the consumer.

But there was no rush to buy. The new prices apparently still looked high to buyers, who have become accustomed to much larger reductions in discount houses and cut-rate appliance stores. Sales in some stores picked up, but merchants were inclined to credit the approaching Easter season or special promotions. Said a Washington furrier: "Nobody broke the doors down. People rush to buy something before the tax goes up . . . not when it goes down."

But in the long run, most merchants thought that their sales would be helped. Although nobody might be inspired to rush to Tiffany's to buy a sapphire-and-diamond ring marked down from $18,300 to $16,500, a lot of less costly items looked more inviting to buyers. Furriers pointed out that the average fur costs $300, and that a tax cut to $30 from $60 could mean the difference between looking and buying. Among the few businessmen who did not cut prices to match the tax reductions were movie operators. Most kept their prices the same and pocketed the tax saving.

Butter prices dropped sharply as the Government lowered the support level to 75% from 90% of parity. Top-grade butter, which sold for an average of 79-c- a Ib. in February, was down to about 69-c- by April 1, when the new supports went into effect. Last week stores across the country made butter a loss leader, and prices dropped to 55-c- and 59-c-. One Chicago chain offered it as low as 49-c-.

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