III. Because of the wartime emergency, Indian handcrafted silver and leather items were included in the goods subject to a Federal excise tax in 1941. Since the wartime justification for such a tax is long past, the request is made now that Congress reaffirm its interest in this art form as expressed in the 1932 exemption to relieve it of such tax. A. Since Indian jewelry especially is a quality item the addition of the 10-percent tax adds considerably more to the retail price thus discouraging sales in competition with cheaper imitations. B. The making of genuine handcrafted jewelry not only provides important income but satisfies a creative need by these talented people. Exemption from the tax would increase sales, resulting in more stable employment for present craftsmen and induce others to return to the field. C. The making of jewelry also provides a creative satisfaction, fits in with tribal life, keeps the Indian at home where he is happier and complements other income from farming and stock raising. D. While there are no national figures, approximately onefourth of the 4,000 Zuni tribal members secure income from crafts. E. Most Indian areas have been designated as depressed and stimulation of economies by assistance to native industry meets the Indian's need for survival, keeps him off the national labor market, and results in other tax income from his increased purchases. F. Much of the jewelry production by Indian craftsmen is purchased by other Indians who especially value it and who also use it as collateral for loans. Their thrift is penalized when they too must pay the added tax. IV. Genuine Indian handicraft has suffered from the competition of widely distributed, machine-produced imitations that cash in on the public's ignorance of true crafts and their similarity to the genuine. A. Sales in the national parks were once an important factor in the demand for genuine Indian handicraft. Much of this market has been lost to the machine-made novelties. A return of part of this market could be expected as a result of the removal of the tax from the genuine craft, thus inducing concessionaires to resume stocking it. B. Since traditional craft is the only significant American cultural item, any assistance given enriches our national life. V. While sales of handicraft are important to the economy of certain Indian tribes, total sales is insignificant in the national tax picture. Maintenance of Congress established interest in fostering traditional Indian life and crafts could thus be accomplished by an infinitesimal loss of revenue that could be more than offset by other tax moneys resulting from improved Indian economies affected. VI. The Inter-Tribal Indian Ceremonial therefore proposes that Congress reestablish the precedent of excise tax relief to Indian handicraft first set out in 1932 by removing such present tax from all native American Indian and Eskimo handicraft presently taxed under its provisions. SUBJECT: RETAILERS-JEWELRY-INDIAN HANDICRAFT WITNESS: P. K. FERREE, CHAIRMAN, BOARD OF DIRECTORS OF THE CHEROKEES. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Repeal of the Federal excise tax on Indian-made arts and crafts would be of great benefit to the American Indian. (This letter was forwarded by Congressman Roy A. Taylor, State of North Carolina.) SUBJECT: RETAILERS-JEWELRY-INDIAN HANDICRAFT WITNESS: CHARLES E. MINTON, EXECUTIVE DIRECTOR, OFFICE OF COMMISSION ON INDIAN AFFAIRS, STATE OF NEW MEXICO. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) Indian handicraft should be exempt from the 10-percent Federal retail excise tax. Repeal of this tax will help place the Indian in a more favorable position economically. SUBJECT: RETAILERS-JEWELRY WITNESS: HERBERT F. UNDERWOOD, JEWELRY INDUSTRY TAX COMMITTEE AND COMMITTEE FOR REPEAL OF THE FEDERAL RETAIL EXCISE TAX. SUMMARY OF STATEMENT I. Equity effects. Ia. Vertical equity as a test. Ib. Horizontal equity as a test. III. Revenue effects. IV. Employment effects. V. Administrative compliance and enforcement costs at the retail level. Finally, additional comments will be offered dealing with peculiar administrative problems encountered by the retail jeweler. SUBJECT: RETAILERS GENERAL -WITNESS: CALVIN K. SNYDER, EXECUTIVE VICE PRESIDENT, AMERICAN RETAIL FEDERATION. SUMMARY OF STATEMENT SUBMITTED FOR THE RECORD (Prepared by staff of Committee on Ways and Means) The American Retail Federation favors repeal of the Federal retail excises and of the manufacturers' excises, but not of the excises on alcohol and tobacco. SUBJECT: RETAILERS FUR WITNESS: J. GEORGE GREENBERG, EXECUTIVE VICE PRESIDENT, ASSOCIATED FUR MANUFACTURERS. SUMMARY OF STATEMENT 1. DISTRIBUTION OF TAX AMONG CONSUMERS BY INCOME LEVELS To our knowledge there can be drawn no definite distinction as to the purchases of our products since they run a gamut from $250 upward. I could not definitely give any other statement as to the distribution. 2. THE EFFECT OF THE TAX ON SALES OF THE INDUSTRY No better proof can be submitted than the collection record of the Internal Revenue Bureau, which indicates from a high in 1946 of approximately $100 million, it has dropped between $29 million and $30 million in 1963, which indicates that from a high of $500 million retail level, that today it is approximately $290 million at retail level. 3. THE EXTENT TO WHICH TAXED ITEMS REPRESENT A BUSINESS COST OF OTHER PRODUCTS OF SERVICES Ours is a final tax and is not affected on any other items of taxation. 4. SENSITIVITY OF EXCISE TAX REVENUE TO CHANGES OF INCOME To answer this I can only quote Professor Musgrave: "That excise taxes have an adverse effect on the function of the economic system." And Professor Eckstein states: "That the reduction of excise taxes make a large contribution to stability by lowering the prices of taxed items, thus making them more attractive for purchase." 5. ADMINISTRATIVE AND COMPLIANCE PROBLEMS WITH RESPECT TO SPECIFIC EXCISE TAXES It is our belief that the Treasury Department and the Ways and Means Committee are more familiar with the problems of administration, especially with the experience they had with fur taxes since 1944. SUBJECT: RETAILERS FUR-MINK WITNESS: KENNETH M. PLAISTED, GENERAL COUNSEL, NATIONAL BOARD OF FUR FARM ORGANIZATIONS. SUMMARY OF STATEMENT 1. We will not be in a position to present any evidence as to the distribution of the Federal excise tax on furs among consumers by income levels. 2. The effect of the tax on sales of the mink farming industry will indicate that the tax is a deterrent to sales at the farm level. 3. The taxed items do not represent a business cost of other products or services at the farm level. 4. The tax is a deterrent and sensitive to sales with regard to changes of income levels and in particular in sales of fur garments in the price ranges of between $200 to $600. 5. The Federal excise tax on furs poses a myriad of administrative and compliance problems, which problems have been increased as a result of a recent administrative ruling by the Internal Revenue Service with respect to the applicability of the excise tax ou fur used for fur trim purposes. While these administrative and compliance problems do not affect the mink farmer directly, the problems do have an adverse effect on sales which may directly affect the prices that the farmer receives for his product. SUBJECT: RETAILERS-FUR WITNESS: HENRY FONER, PRESIDENT, JOINT BOARD, FUR, LEATHER & MACHINE WORKERS UNION, AMALGA........... MÅTED MEAT CUTTERS & BUTCHER WORKMEN OF NORTH AMERICA. SUMMARY OF STATEMENT 21 Decline of the fur industry: (a) Reduction in employment. (b) Reduction in retail sales..... -2. Competitive disadvantage with higher priced nonfur garments. Tax discriminates against lower priced furs. 3. Increased sales could mean increased funds for promotion to reclaim proper share of the garment market. 4. Tax interferes with free functioning of the economic system. No justification for tax on furs. 5. Insoluble problems in administering the tax. SUBJECT: RETAILERS-FUR WITNESS: A. ALBERT EICHLER, MASTER FURRIERS GUILD OF AMERICA. SUMMARY OF STATEMENT The Master Furriers Guild of America has for years held the position that the retail fur excise tax is not a fair or equitable tax because: 1. Experience has shown that this tax has induced women to buy goods other than fur. 2. This tax has been and still is a depressing effect on both labor and capital in the fur field. 3. The 1963 Federal Tax Report shows that less than three onehundredths of 1 percent of the total Federal tax is collected by the Government from the retail fur excise tax, and that does not take into consideration the costs of supervision, collection, and enforcement, thus reducing even this small amount. 4. This tax is a discriminatory tax in that it is borne by the women. 5. The tax is and has been discriminatory in that it causes an unnecessary heavy burden on the class of income group that can least afford it. 6. This tax has caused and is causing unemployment of workers at the retail level and fleeing of capital from the oldest industry in the United States. 7. This tax is causing the slow death to the oldest industry in the United States by discriminating against it in imposing the retail excise tax. 8. This tax has been and still is falsely called a luxury tax. 9. This tax is a regressive and harmful tax far inferior to any equitable tax. 10. The retail fur excise tax has stunted the growth of the fur industry, driven capital investment away from the fur field, and caused untold loss of unreplaceable labor market, thus affecting the economic stability of the fur industry and the country. SUBJECT: RETAILERS-TOILET PREPARATIONS WITNESS: PHILIP F. JEHLE, WASHINGTON REPRESENTATIVE AND ASSOCIATE GENERAL COUNSEL, THE NATIONAL ASSOCIATION OF RETAIL DRUGGISTS. SUMMARY OF STATEMENT As viewed by the 36,000 independent drugstore owners represented by the National Association of Retail Druggists, the retailers excise |