The Beginning of the Sales Tax

June 7, 1933"I think it is as certain as anything in the future can be that the United States will adopt a general sales tax, as a means of raising national revenue. I am sure that will come about as soon as the majority of the people understand what is meant by a sales tax, and when they have had an opportunity to observe the operation of the sales tax in the state of Mississippi."

June 7, 1933"I think it is as certain as anything in the future can be that the United States will adopt a general sales tax, as a means of raising national revenue. I am sure that will come about as soon as the majority of the people understand what is meant by a sales tax, and when they have had an opportunity to observe the operation of the sales tax in the state of Mississippi."

In the Depression years, our government was doling out far more money than it was taking in. Being in the deficit, our national, our state, and our local governments had to do something to bring in more revenue.

A man by the name of Caleb Johnson came up with a plan that had worked in other states such as Mississippi. His proposal was to create a state-wide sales tax which would affect Daviess County as well as any adjoining counties. A quotation shown above states his view of the future. He used Mississippi as the basis of his argument.

It seemed as though the main objection to the tax came about because of the misunderstandings it generated. The theory behind the sales tax was not so much that everybody would pay it, as much as it was everyone knew he/she was paying it. It was said there was no tax of any kind imaginable that was not paid in the long run, by the consumer. By using the new sales tax, everyone would pay proportionally as to what he purchased whether it was a twenty-five pound of flour, a new rocking chair, or five gallon of gasoline.

As long as there was a large number of people who thought they did not pay taxes, and the government’s revenues was derived from only the rich, there was a large group of individuals who tried to get money from the government on the theory that it came out of someone else’s pocket.

The best argument in favor of the new ta was that everyone pay proportionally two cents out of every dollar they spent. The man who bought nothing, paid no taxes.

Researched by Wilbur Bush, Gallatin (2003)