THE
By WILLIAM C. UTLEY
O YOU make $150 a month?
If you do, you'll be inter-
ested—and perhaps a little sur-
prised—to learn that the tax
collector picks your pocket to
the tune of one-eighth of your
income. He sneaks enough from
the family wallet in two years
to buy a new car.
Yes, he picks your pocket. For
this ‘‘take'’—which amounts to 12.7
cents out of every dollar—repre-
sents indirect, or “hidden,” taxes.
They're not like your income tax
or personal property tax or a state
retail sales tax, for you rarely know
when you have to ‘‘shell out’ for
them. They're concealed in the
price of the goods and services you
buy, even the bare necessities of
life such as bread and shoes. ‘Death
and taxes are inevitable''—and all
too often invisible.
These are only a few of many il-
luminating revelations to
the Family
the Northwestern National Life In-
The study was started in Novem-
ber, 1935. Records of 208 concerns
—public utilities, insurance compa-
nies, manufacturers, jobbers and
retailers—were investigated “in an
effort to measure as accurately as
possible the proportion of prices
paid by the consumer for which
taxes—federal, state and local —are
responsible.”
All levies which would not
mally be included in the cost of
goods and services sold were omit-
ted in the calculations which fol-
lowed from the original producer
to the retailer. The principal taxes
entering into the picture then were:
Farm and urban realty taxes, per-
sonal property and general prop-
erly taxes of business concerns, ex-
chise taxes, licenses, fees and fran-
chises, moneys and credits taxes,
gasoline and oil taxes on motor
truck deliveries, import duties and
the tax element in freight costs in-
volved in the various steps of dis-
tribution.
Taxes Are Passed On.
To understand the figures it is
necessary to understand how some
of these indirect taxes work. “In
the case of a retailer who owns
the building which houses his store,”
says the report, ‘‘real estate taxes
are shown on his books as an item
of overhead, and their participa-
tion in the ‘makeup’ which he
must add to his cost prices can be
measured with considerable cer-
tainty.
+ “However, { he rents his store
building, the taxes on the building
are necessarily contained in the
rental paid, and are just as surely
a portion of his overhead expense,
even though concealed in the entry
‘rent.’
“In the wholesale price which the
retailer pays for his merchandise is
necessarily contained an overhead
element consisting of the real estate
taxes on the building occupied by
the wholesaler, and just as neces-
sarily, taxes on the factory which
produced the goods contribute a por-
tion of the price charged the jobber
by the manufacturer.
“This study,” the report contin-
ued, ‘has undertaken to include in
the figures finally attained the prin-
cipal elements affecting ultimate
prices charged, whether actually
listed as ‘taxes’ on the books of
the business, or contained as a por-
tion of some other entry.”
Social security taxes were not con-
sidered, ‘‘because they are in a
sense deposits for future withdraw-
al.”' Gasoline taxes were computed,
because gasoline and oil are sub-
ject te local taxes in all 48 states
and the District of Columbia, in
addition to the federal levy.
Tax-Grabber Is Killjoy.
The researchers estimated that
the average worker's family with
an income of $150 a month spends
$43.50 for food; of this 7.1 per cent,
or $3.09, goes to the hidden tax col-
lector. Of the $30 spent for shelter,
hidden taxes take more than a
quarter, $7.59. They account for 8
per cent of the $18 clothing bill, or
$1.28. Fuel and light cost $11, but
9.5 per cent of this, or $1.05, rep-
resents indirect taxes.
The tax-grabber really cuts into
the family’s enjoyment of life. The
cost of an average used car, includ-
ing license, and gas and oil sales
tax, is $14.50 a month; hidden taxes
get 20.1 per cent—$291. And the
$3.00 the $150-a-month family can
set aside for recreation .includes
30 cents for the tax-grabber, who
seldom shows his face.
Insurance bears a lighter tax
load. Of the $5.00 spent monthly
for that protection, only 2.6 per
cent, or 13 cents, falls into the hid-
den tax barrel. Sundries and mis-
cellaneous items—toothpaste, jewel
ry, tobacco, etc.—which cost $27 a
month are burdened with taxes
amounting to 10.2 per cent, or $2.75,
The hidden taxes which eat away
at an $80 monthly income are slight-
ly less in proportion, since it is
nor-
not odinarily permit the owner.
ship or operation of an automobile.
Here's the way the
fares with that one: !
%of Taxes Amount
Cost Found eof Tax in
Per Month in Cost Dollars
$27.00 7 $1.92
25.3 455
ng . . 7
Fuel and Light
Transportation
(Streetcar)
Recreation
Insurance ‘
Sundries & Mis-
cellaneous . 12.00
$67
... 596000 120 $116.04
Taxes on $200 Income.
There is a slight difference in the
proportion of hidden taxes to the
spending of a family with an in-
come of $200 a month. This is again
accounted for by the automobile,
as shown:
Annually
% of Taxes
Found Tax in
in Cost Dollars
Cont
Per
Month
$48.00
Shelter . 38.00
Clothing “ns 22.00
Fuel and Light . 14.00
Transportation (Auto
bought new) . 20.00
Recreation 6.00
Savings
Insurance
Sundries & Mis-
cellaneous 10.2
Total $200.00 Av.12 4
Annually .. 5240000 124
*Alsc includes license, and gas and
oll sales taxes
**Tax ratio to total time and demand
deposits In banks studied was 2 per
cent. However, the effect of this tax
would obviously not be to increase the
savings depositor's outlay, but could
only affect him by reducing the interest
yield on his savings. The moneys and
credits taxes levied by many states are
paid directly by depositors, with wide
variation in rates and in minimum
exemptions,
“After arriving at general tax
ratios for the various lines of goods
and products represented by the
concerns studied,” says the report,
“further studies were made of in-
You'll never recognize ‘em, ma-
dame, but hidden taxes will account
for 8 per cent of what you pay for
that dress!
dividual products in certain lines—
in the case of food products, bread,
pork, beef, sugar etc. The results
of these studies gave an additional
series of checks though, necessarily,
individual items varied rather wide-
ly in some cases from the tax pro-
portions arrived at for the general
group of goods.”
The loaf of bread for which you
pay a dime bears in its cost .64
of a cent in hidden taxes, the study
disclosed. Beef prices contain in-
direct taxes amounting to 8.14 per
cent; pork prices, 8.04 per cent.
A five-pound bag of sugar costs a
nickel more than it would if there
were no indirect taxes concealed in
it.
Rent Boosted by Taxes.
If the man of the house buys
suit of clothes for $25, a
The great proportion of indirect
taxes to residential rental costs was
with the aid of real
estate companies in 48 cities; rec-
ords on representative local prop-
erties were taken at random from
their files.
A total of 7,964 single and multiple
family dwelling units were covered
by the final averages. These re-
vealed that taxes represented 28
per cent of the current rental rate
of the one-family dwellings studied:
19.2 per cent of the rental rates of
the duplexes and 13.6 per cent of
the rental rates of the apartments.
“The notably lower ratio of taxes
to apartment dwellings is due,” savs
the report, ‘‘first to the fact that a
portion of the apartment rental dol-
lar represents fuel, water, rent, jan-
itor service, etc.: second floor
space is more intensively occupied
in apartment buildings, and third,
apartment rental rates have in gen-
eral recovered somewhat f
house rental rates. In many
munities, however, tax rates
mounting approximately as fast as
rental rates are recovering.”
Average Motorist Taxed $48,
The automobile today has passed
the stage where it may be classified
as altogether a luxury. But it's a
free luxury for the tax-grabber: in
fact it's soft picking for him. Mo-
torists paid an average of $48 apiece
in taxes, direct and indirect, con-
tributing a total of $1,340,000,000 or
10% per cent of the nation's entire
tax revenues during the fiscal year
ended June 30, 1837, according to
the study.
In a detailed advance estimate,
the report sets total federal, state
are
000,000 for the fiscal year just ended.
General property taxes contribute
$4,718,000,000, and income taxes
federal, state, and
000,000 according to the study, with
motor vehicles ranking a strong
third as a source of revenue.
Gasoline and oil taxes, totaling
$884,000,000, make up the bulk of
motorists’ current tax contribution.
Combined federal and state taxes
on, gasoline average slightly over
five cents per gallon, for the coun-
try as a whole.
The purchaser of a new low-priced
car pays $101 in taxes, direct and
indirect, during his first year of
ownership, according to the study.
He pays approximately $64 in
taxes as a part of the original pur-
chase price, the study shows. This
figure includes $3.30 estimated tax
content in the freight costs, $14.41
in excise taxes, and numerous di-
rect and indirect taxes which ac-
cumulate in material and produc-
tion costs to an estimated amount
of $46.10.
Computations Conservative.
If the motorist operates his car
7,200 miles a season, his gasoline
and oil sales taxes will total ap-
proximately $23; with an average
cost for his new car license of
$14.50, a motorist thus contributes
some $101.50 in taxes during his
first year of ownership.
If, however, the $64 of taxes con-
tained in the original purchase price
is averaged down to an annual de-
preciation basis of $10.42, assum-
ing resale or trade-in at the end of
the third year for $350, the motor-
ist’s average tax cost becomes
$48.14 annually for the three years,
the study shows. This figure is com-
puted on the very conservative op-
erating basis of 7,200 miles per sea-
son, the repart points out.
" The owner of a used car in its
ADVENTURERS’ CLUB
HEADLINES FROM THE LIVES
OF PEOPLE LIKE YOURSELF!
“Assassins of the Nile”
By FLOYD GIBBONS
Famous Headline Hunter
YS" know, boys and girls, I have often said that you'll find
adventure close to home a darned sight easier than you will
roaming the world. One who goes traveling in search of thrills
usually doesn’t find any until he gets back into his own bailiwick
again. But there are exceptions to every rule—and here's one
of them. George C. Dorste of Bardonia, Rockland county, N. Y.,
met his biggest thrill when he was thousands of miles away from
home and in a strange exotic country,
The country was Egypt, and George landed there in the course of
his travels as a fireman on a tramp steamer. The steamer was carry-
ing scrap iron, unloading it in consignments of various sizes at ports
along the Nile river and its many branches. The year was 1912, and the
just south of the town of Medinet El Faiyum.
The ship was anchored not far from a pier. The weather
is pretty hot in Egypt. In the afternoon, particularly, the sun
beats down with such intensity that it is next to impossible for
anybody but a native to do any work. It was at the height of
the hot season, and the crew of the steamer, dripping sweat
from every pore of their bodies, were just about all in. Along
in the afternoon the skipper gave orders for all hands to knock off
work for the rest of the day.
The men didn’t argue about that. Most of them just walked to the
rested. But there were a half dozen young fellows—George among them—
who had a better idea. They stripped off their clothes and dived over
the side into the water.
A Dandy Day for Lazy Sport.
Those lads were in it,
They came out,
The water was cool and refreshing. off and
on, for the better part of the afternoon.
a breathing spell on the ship's deck,
iron hull of the vessel made it so hot that they were glad to
the water again.
The afternoon wore on and the sun began sinking toward the
horizon. As its scorching rays withdrew little by little, the day
became cooler. One by one the swimmers climbed back aboard
the steamer and stayed there. Finally all of them were out of
the water except one. And that one man was George Dorste,
George loved the water and he hated to leave it
get back in
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and the pier. As he splashed about in the river he heard a voice calling
on shore and, looking up, saw a native standing on the pier.
If George Had Only Been a Linguist!
The native was shouting to George, but in a language he didn“
understand. Then suddenly, he began to point toward the ship. George
The great reptile was between him and the ship.
could figure out only one reason for that pointing. He immediate)
over the side and wanted him to retrieve it.
He turned and swam slowly toward the ship. The native on
the pier kept right on yelling, but George paid no attention. And
then, suddealy, he saw it—a thing that looked like a log floating
in the water, but a log that had a rough wrinkled snout and a pair
of glassy eyes just showing above the surface!
A crocodile!
The great reptile was between him and the ship—and not more than
twenty feet away from him. A shudder went through George's body
when he saw it. He turned and began swimming toward the pier. But
the pier was a great distance away—or at least, so it seemed to George.
He knew that beast could catch up to him in less time than it takes to
tell the story.
He Looked Like Good Meal to Crocodile.
He was swimming as fast as he could—exhausting himself in a spurt
for the pier. And the crocodile was following along behind. It seemed
to George that the great reptile never approached any closer than that
original twenty feet—the distance that had separated them when he
turned toward the pier. Was the beast playing with him, as a cat would
with a mouse? Or was it waiting until George had exhausted him-
self in the swim toward shore before those cruel jaws opened and closed
over him?
Still swimming frantically, he reached the pier. And then an-
other terrifying discovery greeted him. As he made frenzied ef-
forts to climb up the piles that supported the pier, he found that
he couldn't. Those piles were covered with a slippery moss. He
could make no headway up them. And all the time, now, the
crocodile was coming closer, swimming slowly toward what it
knew must inevitably furnish it its evening meal.
By now, George was mad with terror. He was still clawing ana
scraping frantically at those smooth, moss-covered piles, when the na-
tive on the dock came to his rescue. Suddenly, the native picked up a
huge piece of scrap iron from a pile on the dock, and hurled it at the
swimming crocodile. The piece missed. The native threw another—
and that one found its mark. It hit the beast on the snout, and it dived
beneath the surface.
Native’s Accurate Peg Saves George's Life.
By that time a boat had been launched from the ship. It came tear-
ing across the water as George's shipmates pulled hard on the oars. It
reached George a few seconds after the crocodile had gone down.
“As they pulled me out of the water,” George says, “I lost
consciousness for a minute or two. But I came back to life be-
fore the boat had reached the ship—in time to see the steely eyes
of the crocodile which had reappeared once more. It was fol-
lowing along, not more than ten feet behind the boat.”
And George says that if he'd had a gun then, it would have given him
the greatest pleasure to aim it right between those two glassy eyes
and pull the trigger.
©--WNU Service.
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