Page:Popular Science Monthly Volume 50.djvu/754

732 other purposes" (passed August 28, 1894) was under consideration by the United States Senate, and pending a proposition to increase the revenue by increasing a tax of about 680 per cent on the average prime cost of distilled spirits to a rate of nearly 825 per cent, a Senator, apparently utterly oblivious that the subject involved had years before been thoroughly considered by the United States Treasury Department and declared to be impracticable, submitted a motion permitting the use of alcohol in the arts, or in medicinal or other like compounds, without the payment of any internal revenue tax. The motion in question, after a very brief consideration, was accepted and incorporated in the laws of the United States. The result was that the Secretary of the Treasury reported that in default of any appropriation to defray the expenses of administering the act, and an unsuccessful attempt to frame regulations which would protect the Government, the Treasury Department was constrained to abandon the effort and await further action by Congress. It was also estimated that the expense to the Government of attempting to administer the act would probably be not less than one million dollars per annum; that the loss of revenue contingent on its enforcement would be about ten million dollars yearly, and that the loss of revenue from an increased opportunity for illicit and fraudulent practice would also be very considerable.

Under such circumstances Congress, in 1895, repealed the act of exemption, but subsequently a strenuous effort has been made to re-enact it. The main argument adduced in its favor is that the present cost of alcohol would be largely reduced, whereby certain industries which use it as a raw material would be greatly benefited. That such a result would be in accordance with a general economic principle can not be disputed, and, such being the case, the question is pertinent. Why limit the exemption to the one material, alcohol? Why not equally grant exemption to manufacturers who use wool, coal, the various ores and metals, crude tobacco and the like, as raw materials?

As already pointed out, the taxation of distilled spirits constitutes the largest single source of national revenue, and as such, its consideration by legislators, more especially in view of the present fiscal necessities of the Government, ought to be strictly limited to the one point of ascertaining its greatest availability for revenue. The existing tax of 800 per cent on proof spirits and more than 1,200 per cent on its derivative, alcohol, constitutes a temptation to evade payments which human nature as ordinarily constituted can not withstand. Illicit distillation is admitted to be on the increase in the country, and American ingenuity has been active in facilitating it. It is now proposed to further increase temptation by offering an approximate profit of two