The Elements of Public Finance Including the Monetary System of the United Stat
The Elements of Public Finance Including the Monetary System of the United Stat
Winthrop More Daniels
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The explanation of these seeming discrepancies will shed light upon some of the most striking features of the tax on distilled spirits. The small product disclosed m 1862-3 is explained by the rawness of an inexperi- enced body of administrative officials. The immense in- crease in the amount returned the following year was due to the fact that the Act of March 7, 1864 (which raised the tax rate per gallon from 20 to 60 cents) did not apply to stocks on hand at that date.^ The increase in the r...ate of taxation and the necessary rise in the selling price of all spirits produced after the higher tax rate was to be in force were both foreseen. The distillers con- sequently strained every nerve to augment their stocks before the advance in the tax rate became operative. Hence the enormous amount returned for taxation in the fiscal year 1863-40 The failure to make the higher tax rate retroactive put millions into the pockets of the distillers. At this point another element begins to enter into the problem.
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