manufacturers producing this type of product. Again, if no relief is provided for the manufacturer who uses small percentages of crude rubber in his products, many of them, including my company, will be forced to curtail their operations drastically, and this curtailment will add very little to the Government stock pile because of the small amounts of crude rubber used by them even in normal times. The CHAIRMAN. Well, sir; thank you very much. I think that exhausts the witnesses for today. We will recess until 10 o'clock tomorrow. (The following letters, memoranda, and statements filed with the committee were ordered inserted in the record :) Hon. WALTER F. GEORGE, ARKANSAS PHARMACEUTICAL ASSOCIATION, Chairman, Senate Finance Committee, Washington, D. C. DEAR SENATOR GEORGE: My name is Irl Brite, secretary-manager of the Arkansas Pharmaceutical Association, and I reside in Little Rock, Ark. I thank you gentlemen of this committee for the privilege of submitting to you a brief statement in opposition to an increase in the excise tax on gasoline. I would like to point out that it is not the desire of representatives of my organization or any other loyal Arkansan to shirk his just share of the national-defense burden. All of us realize that the emergency must be met and the cost shall fall upon all of us. However, we feel that the expenditures for national defense should be borne equally by all citizens, and we also feel that it is the wish of your committee to see that an equitable distribution of taxes are levied. In view of the fact that the operators of motor vehicles are now paying a large share of the expenditures for national defense, we believe that any increase in the Federal gasoline tax at this time would further bring about a disproportionate share of the burden upon highway users. While the Federal Government is in no wise responsible for Arkansas' high gasoline tax of 61⁄2 cents per gallon, it is, nevertheless, a burden and especially so with the present Federal gasoline tax of 11⁄2 cents per gallon, making a total tax of 8 cents per gallon on all gasoline consumed in this State. We will thank the members of your committee to give this matter deliberate, considerate consideration before increasing the excise tax on gasoline. Sincerely yours, IRL BRITE, Secretary. ALABAMA INDEPENDENT SERVICE STATION ASSOCIATION, INC., Hon. WALTER F. GEORGE, Chairman, Senate Finance Committee, United States Senate, Washington, D. C. DEAR SENATOR GEORGE: I am enclosing herewith a statement in opposition to the proposal to include an additional gasoline tax in the tax bill now being considered by your committee. It will be appreciated if you will refer it to the committee and place it in the records of the committee hearing. Encl. Very truly yours, ALABAMA INDEPENDENT SERVICE STATION ASSOCIATION, INC., By L. L. LANE, President. To the Chairman and Members, Senate Finance Committee: GENTLEMEN: I would like to appear personally before you gentlemen to oppose the suggested increase of 1 cent per gallon in the Federal gasoline tax, but I cannot leave my service station long enough to come to Washington, and haven't the money necessary to make the trip. For those reasons the following information is given in this form for your consideration and for the committee record. It has always been our belief that since the States had created the gasoline tax, as a type of tax for road purposes, and since the use of gasoline tax revenues for general governmental purposes definitely constitutes "double" taxation on a group of citizens, most of whom are less able to pay special and double taxes, the Federal Government should never have gone into this tax field. We have constantly fought to retain this particular tax solely to the use of the States for road purposes. The logic in this policy is borne out by the fact that the motorist has already made an outstanding contribution to national defense by way of the finest highway system in the world. The Federal Government is now on the verge of destroying that which has made it possible for the motorist to do the road-building job that has been done. If the Federal Government continues to infringe upon this tax field and overload the motorist, the gasoline tax, as a type of tax, will ultimately break down, and with it our highway system will go to pot. The present total gasoline tax in Alabama is a 68-percent retail sales tax. Last year when the Federal gasoline tax was increased 50 percent for national defense along with lesser increases on other commodities it was not opposed because "quick" money was recognized as essential and we were in accord with the need for preparedness. However, we see in this newest proposal extreme danger to ourselves as businessmen, and to our national defense efforts as well. We find ourselves asking the question, "Why is it even considered?" There are adequate immediate and future supplies of petroleum products for every need. Gasoline is not the only commodity that could be taxed heavily enough to bring in large amounts of money. The service station operators of Alabama and others too, I am sure, are ready and willing to accept their fair share of the tax load. However, our ability to do so rests in the success of our business, the sole means of our income. If the Federal gasoline tax and the State general sales tax were the only taxes on our principal product, we would have no complaint nor cause for concern. Unfortunately, this is not the case. Every item of merchandise sold by us bears from two to four separate and distinct sales taxes ranging from 41⁄2 percent on parts and accessories to 67 percent on gasoline. We now work 1% days out of every 3 for Federal, State, county, and city governments collecting taxes, without pay of course, on our merchandise. In addition to that we pay State, county, and city privilege taxes from 2 to 20 times greater than those on any other business. We have always paid our own way and expect to continue if permitted to do so. About half of our customers have just so much money to spend with us for petroleum products. We know this because we are personally acquainted with them. We know that any additional tax will cause them to cut down on the use of our products. There are many customers who never buy more than 1, 2, or 3 gallons of gasoline at a time, and most of them use their cars for pick-up trucks in their work. These are the same good American citizens who have already during peace time, contributed millions of dollars to national defense by way of highways and bridges already built, and who are also already contributing millions of dollars to the Federal and local governments in special motor taxes being used for general purposes. Very truly yours, ALABAMA INDEPENDENT SERVICE STATION ASSOCIATION, INC., Hon. WALTER F. GEORGE, UNITED STATES SENATE, COMMITTEE ON MILITARY AFFAIRS, August 12, 1941. Chairman, Senate Committee on Finance, United States Senate, Washington, D. C. MY DEAR SENATOR GEORGE: At the direction of Senator Lodge, I am submitting the enclosed telegram from Lt. Gov. Horace T. Cahill, at present Acting Governor of the Commonwealth of Massachusetts, for such action as you may deem proper. Very sincerely yours, T. W. WHITE, Secretary. [Telegram] BOSTON, MASS., August 11, 1941. Hon. HENRY C. LODGE, United States Senate, Washington, D. C.: Strongly protest contemplated 1-cent increase Federal gasoline tax. Will impose additional burden on 71⁄2 millions of Massachusetts motorists and invade field of taxation which Senate Finance Committee, in its report of May 10, 1933, said should be reserved to the States. Respectfully, HORACE T. CAHILL, Lieutenant Governor, [Telegram] HELENA, MONT. Hon. WALTER F. GEORGE, Chairman, Finance Committee, Senate of the United States, Reference is made to Federal revenue bill passed by House and now before your committee. My attention has been directed to recommendation by Treasury Department that bill be amended include 1-cent increase Federal excise tax gasoline. Proposed tax gasoline counting 1940 increase will bring total increase to 150 percent over 1939. Large percentage gasoline tax this State paid by farmers and essential transportation and believe this applies Nation-wide. Gasoline tax long ago removed from luxury and nonessential classification. Additional gasoline tax would further increase heavy burden now borne by lower income groups on a real necessity. Gasoline tax levy is major source of State highway income and I am fearful that further increase Federal tax bill will jeopardize State income for highway construction and maintenance purposes not to mention heavy taxation now borne by highway transportation, the disparity of taxation of consumers of gasoline, and other factors. My opinion is that proposed increase gasoline tax for national defense may have undesired effect not to mention effect on farming and agricultural production which we all consider vital to national defense. Speaking for Montana and endeavoring to look to the best interests of its citizens and with due consideration to necessary national-defense efforts I desire to enter my protest against amendment of the bill to include further increase of Federal excise tax on gasoline. I shall appreciate it if you will bring this protest to attention of your committee and file same as part of the record of hearings before it. SAM C. FORD, Governor of Montana. [Telegram] HELENA, MONT., August 14, 1941. Hon. WALTER F. GEORGE, Chairman, Finance Committee of Senate, Washington, D. C.: I wish to go on record heartily endorsing in full night letter sent your honorable body by Gov. Sam C. Ford on 13th instant opposing any further increase in Federal gasoline excise tax. SAM W. MITCHELL, Secretary of State. [Telegram] HELENA, MONT., August 14, 1941. Hon. WALTER F. GEORGE, Chairman, Senate Finance Committee, Washington, D. C.: Relative revenue measure passed by House now before your honorable body for consideration. This commission has given due consideration to proposal Treasury Department to increase Federal gasoline tax and wishes to go on record as unalterably opposed thereto and endorsing in full telegram to you 13th instant by Gov. Sam C. Ford of this State. HIGHWAY COMMISSION OF MONTANA, By H. W. HOLMES, State Highway Engineer. Hon. WALTER F. GEORGE, [Telegram] HELENA, MONT., August 14, 1941. Chairman, Finance Committee, Senate of the United States, Washington, D. C.: Refer to Federal revenue bill passed by House and now before your committee. Understand Treasury Department has recommended that bill be amended to include 1 cent increase Federal excise tax gasoline. As one familiar with conditions in Montana, I urge that your committee refuse to approve amendment referred to since a further increase in gasoline prices will not only injure all the people of this State, but will hinder our highway construction as well. I sincerely believe that in the public interest no further tax be placed on gasoline because this will reflect in the price here and will present a burden too heavy for most of our people to bear. JOHN W. BONNER, Attorney General. Hon. WALTER F. GEORGE, ARKANSAS WHOLESALE GROCERS ASSOCIATION, INC., Chairman, Senate Finance Committee, Washington, D. C. DEAR SENATOR GEORGE: My name is William L. Humphries, secretary-treasurer of the Arkansas Wholesale Grocers Association, Inc., Little Rock, Ark. I respectfully ask permission to present the views of our organization with reference to the proposal to increase the Federal gasoline tax 1 cent per gallon. Our organization is fully cognizant of the fact that taxes must be raised to defray expenses of the national-defense program, and there is no intention of questioning the sincerity of these endeavors to finance the defense program through increases in existing taxes or the addition of new levies, but at the same time it is appreciated likewise that the Congress intends fully that there should be an equitable distribution of the cost of defense among the different taxpaying groups. United States Government figures show that more than one-half of the owners and operators of motor vehicles, the chief consumers of gasoline, earn less than $30 per week. Despite their limited ability to pay, these consumers are now contributing more than 14 percent of all the taxes collected by Federal, State, and local units of government. The existing disparity in taxation of consumers of gasoline was intensified when the Federal gasoline tax was increased in 1940 one-half cent per gallon, or 50 percent, while taxes on other commodities in this same revenue measure were increased only 10 to 16 percent, except distilled spirits, toilet preparations, and cabaret admissions. In view of the fact that the operators of motor vehicles are already paying more than their share of taxes for national-defense purposes, we feel that the taxes should be evened up on other commodities before any additional taxes are added to gasoline. The operators of motor vehicles in Arkansas are deeply appreciative of the action taken by the House Ways and Means Committee by rejecting the proposal to increase the Federal excise tax on gasoline. We sincerely trust that if this matter is brought to the attention of your committee that it likewise will take similar action. Respectfully yours, ARKANSAS WHOLESALE GROCERS ASSOCIATION, INC., MOTOR VEHICLE ASSOCIATION OF ALABAMA, INC.. To the Chairman and Members, Senate Finance Committee, Washington, D. C. The trucking industry is already contributing heavily in taxes to the Federal, State, and local Governments and is the only form of transportation that has not requested and secured governmental subsidies in one form or another. Any additional gasoline tax would constitute a special tax on motor transportation, while some of the other forms of transportation would go untaxed. Trucks constitute one of the most vital factors of national defense but, at the same time, they have been the objects of vicious and destructive regulatory legislation and restrictive taxation, practically all of which has been sponsored by competing forms of transportation. Most of this legislation, in spite of all efforts of motor transportation and its shippers, is still in effect, and we are trying to operate against overwhelming odds already. The laws and taxes adversely affecting this industry have been publicly recognized as serious bottlenecks to national defense. Any additional tax on our operations will tend to make it more difficult to handle our part in the national-defense program. Our organization is composed not only of for-hire carriers but of private carriers as well, including farmers, lumbermen, various wholesale businesses, fruit and berry growers, and others. These truck owners unquestionably will be required to contribute heavily to Federal-tax revenues by way of other general taxes. They expect to do so, and we are glad to contribute their share to national defense but are in no position to contribute twice while others contribute once. While the importance of the trucking industry in national defense has been emphasized almost constantly by governmental authorities, it is pointed out by the United States Department of Agriculture that farmers are most affected by the gasoline taxes. The trucks in Alabama last year, together with other motorvehicle owners, paid 40 percent of all State-collected taxes. They also paid about 20 percent of all taxes collected by municipalities. It would appear that the motor-vehicle owners are already carrying much more than their share of the tax loads of all branches of government. It is to be remembered that the motorvehicle owner and industry operating trucks first pay all general taxes and then, in addition, pay special levies merely because they operate motor vehicles. The Federal gasoline tax definitely constitutes double taxation on a select group of businesses and citizens. When thinking of national defense, preparedness, and even war, it is agreed by everyone that roads and bridges are probably the most vital necessity of all, especially in this modernized day and age. In considering new taxes for these purposes, should we not remember that the motor-vehicle owner of the United States has already contributed billions upon billions of dollars to our national defense by way of the finest highway system in the world? He will continue to contribute unless he is prevented from doing so by unfair and discriminating taxation. Very truly yours, MOTOR VEHICLE ASSOCIATION OF ALABAMA, UNITED STATES SENATE, August 18, 1941. Mr. FELTON M. JOHNSTON, Clerk to the Finance Committee, Senate Office Building, Washington, D. C. DEAR SIR: Upon appeal of some people from my State, I request that the attached argument against gasoline taxes be included in the committee hearings on that proposal. Respectfully submitted. JOSEPH ROSIER. WHY FURTHER INCREASE IN THE FEDERAL GASOLINE TAX SHOULD NOT ALSO BE ADDED TO THE REVENUE BILL OF 1941 The provisions of the revenue bill of 1941 as approved by the House of Representatives do not embody any increase in the prevailing Federal gasoline tax rate of 12 cents a gallon. Instead, car owners were asked to assume their new share of additional defense costs in the form of increased excise tax rates on other automotive commodities and a new annual use tax of $5 for each vehicle. The Federal gasoline tax rate increase was not omitted from the House revenue bill because the revenue possibilities of such a tax increase were overlooked. A concrete proposal to raise the Federal gasoline tax rate from 12 to 22 cents a gallon was considered by the House Ways and Means Committee during the extensive hearings on the revenue bill conducted by the committee. |