The Crittenden Automotive Library

AUTO MAKERS PLEAD FOR CUTS IN TAXES

Publication: The New York Times
Date: 25 October 1925
[Non-automotive sections removed.]

Promise to Lower Prices to Purchasers to Full Extent of Tax Reductions.

ADMISSION TAXES OPPOSED

Special to The New York Times.

WASHINGTON, Oct. 24.—An immediate cut in automobile prices was pledged by leading manufacturers of the country before the Ways and Means Committee this afternoon, provided the taxes on cars, trucks, parts and tires, amounting to $120,000,000 were taken off.

Eighty-four makers of 105 types of vehicles indicated that an average price cut of $29 would be made to the public the moment Congress removed the taxes. Manufacturers of bodies, parts and batteries gave assurances that they would give the buyer the benefit of whatever reduction might come to them through the removal of taxes.

The rubber industry also assured the committee that it would do all it could in this direction, but pointed out that the enormously increasing cost of raw rubber had placed it in a peculiar position.

The automobile men were one of three groups who urged the committee to abolish or cut heavily the nuisance taxes which were originally passed as war measures. Delegates from the moving picture industry sought repeal or reductions of the admission taxes and tobacco interests asked for lower taxes.

Although the entire day was devoted to discussion of these excise taxes, an important incident occurred when Chairman Green of the committee announced his support of the Delano plan, which calls for immediate reduction in inheritance taxes and their elimination in six years.

Representative Garner, ranking Democrat of the committee, admitted later that the Delano plan “appealed” to him, and this was heard with interest, as he and Mr. Green have been sponsoring a plan under which the Federal law would remain on the statute books to force the States to pass estate tax laws equally as drastic as the Government's. The present law permits a deduction of 25 per cent. credit on the Federal inheritance tax on account of State taxes paid. Mr. Green and Mr. Garner would have allowed full credit, while the Delano program provides an 80 per cent. deduction.

Mellon for Early Repeal.

While Secretary Mellon asked the Ways and Means Committee last Monday to repeal the death duties, evidently he did not expect that this would be done at once, for he added that, failing prompt repeal, there should be a heavy reduction in 1926, with the tax being wiped off the books in 1927. Informal advices at the Treasury this evening were that the department considered the six-year period proposed in the Delano plan too long.

The committee paid chief attention today to the automobile manufacturers' proposals. The existing war taxes levy 5 per cent. on automobiles and motorcycles, 3 per cent. on trucks, including taxicabs, and 2½ per cent. on tires and parts.

George C. Graham of the National Automobile Chamber of Commerce and other witnesses brough out that, although only $31,000,000 excise tax was paid on the $56,722,000,000 total value of all American manufactured products in 1923-24, exclusive of the automobile products, the automobile production, amounting to $3,476,000,000 had to pay a tax of $155,000,000.

Motorists were overwhelmed with Federal, State and municipal taxation reaching $531,551,000 annually, Mr. Graham declared, segregating these figures into $126,551,000 paid to the Government, $390,000,000 to the States and $15,000,000 to municipalities.

On the stand last Monday Secretary Mellon placed the Government yield from automobile taxes in 1925 at $125,000,000, of which $90,000,000 came from passenger cars and $35,000,000 from trucks and parts. He would, he said, advocate cutting off the $35,000,000, but because the Federal government contributed more than $90,000,000 in road building he would oppose abandonment of the $90,000,000.

Mr. Graham declared that motorists paid in taxation as much as 48 per cent. of the total highway bill of the ntaion.

Says Consumers Pay Auto Tax.

Oscar Brown of the American Automobile Association called attention to the fact that motorists had been taxed $864,000,000 by the Federal Government since 1917, the tax imposed on the manufacturer always passing on to the consumer.

“Four times as many people are interested in the repeal of excise taxes as are interested in reducing income taxes,” he said, giving as a reason that automobile owners quadrupled income tax payers and there were ten adult owners for every income tax payer.

Pledges that the part makers and body makers would pass on the relief to consumers were made by E. P. Chalfant of the Motor and Accessories Manufacturers' Association and David Widman of the Automobile Body Builders' Association. Another witness who asked for the repeal of the taxes was P. H. Kelly of the National Battery Manufacturers' Association.

For the rubber industry, H. C. Van Cleef, Chairman of the Rubber Association of America and secretary of the B. F. Goodrich Company, told the committee, in urging the abandonment of the tax, that raw rubber costing 20 cents a pound two years ago had gone to $1. This, he said, was chiefly due to the sliding scale of duty imposed by Great Britain on exports from her rubber plantations.