 It's time for the Lawn Jean Chronoscope, a television journal of the important issues of the hour brought to you every Monday, Wednesday, and Friday, a presentation of the Lawn Jean Wettner Watch Company, maker of Lawn Jean, the world's most honored watch, and Wettner, distinguished companion to the world-honored Lawn Jean. Good evening. This is Frank Knight. May I introduce our co-editors for this edition of the Lawn Jean Chronoscope? Larry Lisser of the CBS television news staff and Kenneth Kramer, executive editor of Business Week magazine. Our distinguished guest for this evening is Charles R. Sly, Jr., president of the National Association of Manufacturers. Mr. Sly, upon your election in 1953 as the president of the National Association of Manufacturers, you pledged industry's whole-hearted cooperation with the Eisenhower administration. Have you had any occasion to change your views? No, I think we want very much to cooperate with the Eisenhower administration. That does not necessarily mean, of course, that we're going to agree with everything they do. NAM set certain policies which it wishes to follow based on principles which we believe are sound, and we believe in going straight down the line for those principles. Once in a while we don't happen to agree with the administration as there was a case in connection with the excess profits tax, but we would like to cooperate with any administration in office in this country to build a greater America. May I ask you, sir, what about the president, the president administration's plans to lower tariffs? Well, now you're on a subject that I can't talk about very well because NAM has no position on tariffs. We find that our members have such widely divergent opinions and views because of the different businesses in which they're connected that we don't feel NAM can speak effectively for its over 20,000 members on the matter of tariffs. Some of our people want high tariffs, some low, and we feel that because of the widely divergent opinions we cannot have a position on tariffs as such. But if we don't lower tariffs, what can Europe and Asia do to keep their economies healthy, sir? Well, as I say, we have no position on tariffs. I think there are other matters in connection with foreign trade which are important. I think that many things can be done to help Europe, help itself. I've been very much encouraged recently to read about the meeting of the six powers in Western Europe, Holland, Belgium, Luxembourg, Italy, West Germany and France. I understand their meeting to try to break down the economic barriers which now exist between their countries and allow a free flow of goods and services and people within their borders. I think any such breakdown of those economic barriers and making a united whole out of those six countries will do a very great deal. To promote the economic well-being of Europe. And I think other steps along that same line should be taken if Europe is going to grow strong economically. Mr. Sly, another subject of considerable importance is taxes. People who do their Christmas shopping early, I think, have already been renewed to the idea that there are some terrific excise taxes imposed on certain goods. Is it true that the NAM wants to have even more excise taxes imposed? No. We believe that the present excise tax system is a veritable hodgepodge of discrimination. Do you mean luxury taxes, sir, when you say that? Some people call them luxury taxes, but I don't think any of us here tonight would agree that an electric light bulb is a luxury and yet electric light bulbs are taxed at 20%. The people that drive their cars to work in this country today are in the millions and they need those cars. I don't think cars are luxuries and yet they're taxed at 7%. I could be down a long list of literally thousands of items that are now subject to excise taxes. We think that all those excise taxes, which we believe are discriminatory, should be done away with entirely. And that in place of those taxes, not a new tax, but in place of those discriminatory excise taxes, we should impose a flat rate manufacturers excise tax on all manufactured products, except food and food products, and except liquor and tobacco, which historically in this country have been taxed separately. And we feel that liquor and tobacco should continue to be taxed separately. Now, it happens that a flat rate tax of approximately 5% on the manufactured goods would bring in the same amount of revenue, as is now being brought in through the very highly discriminatory taxes, which are now in effect. Well, isn't the problem of this administration to raise additional revenues and if you take away the luxury taxes, you replace it with a general manufacturer's tax, would that bring in additional revenues or just make up for what has been lost out of the luxury tax? It would not bring in any additional revenues. My fear is that the present discriminatory system will not continue to bring in what it is now bringing in. I think there are very definite indications of that fact. For instance, last year the movie industry very nearly got their admissions tax removed. Under our plan, all admission taxes would be removed. All services would be removed from taxation. Today, of course, telephones, telegraph, transportation of persons, transportation of freight, and many other services are taxed. We would do away with all those service taxes. You mentioned discrimination. I've often heard it said that if you put in a cross-the-board excise tax or a general sales tax, that that would be discriminatory against people in the lower income brackets. That is commonly said. I don't believe it is true. No, I don't think it is. You see, we would exempt food and food products. We would exempt all services. Over 50%, in fact, I've seen figures that indicate it's as high as 65% of the expenditures of the low and middle income groups are made up of food and food products and services such as rent and so on. And those things under our plan would be exempt. And actually, we find that the low and middle income groups would not pay any more on the aggregate than they're paying today. Who would bear the burden of such taxes, Mr. Sly? Wouldn't the retailers add their mark up on top of the tax? I'm glad you mentioned that and I might point out this applies not only to excises, it applies to every type of tax of which we can think. People pay taxes. They always will. And the idea that a corporation can pay without hurting any people is a fallacy. In other words, some people unfortunately think that because a tax is applied to a corporation that somewhere other than brick and mortar and machinery are going to pay the taxes. People pay the taxes. Either the employees are going to be penalized, the management, the owners, or the consumers. When corporation taxes are applied and people are always going to pay taxes and they will pay consumption taxes or consumer taxes. Well, would you be removing the taxes from the corporations and passing them on to the consumer this way? No, we don't. We don't plan to do that at all. We merely replace the present discriminatory taxes with a fair and equitable distribution of the present excise tax load. You see, today we truly have a hidden excise tax system because I doubt whether any one of our audience realizes that there are today thousands, literally thousands of items that are taxed. And the rates range from 465,000 of a cent a pound on sugar up to 25% on many items. That is truly a hidden system because nobody can keep track of all the taxes they're forced to pay. But a 5% excise tax, flat rate on all manufactured products except food and food products, would be a tax that everyone would know about. It would not be a hidden tax at all. Well, may I ask you just what the difference is between a general sales tax and an excise tax? I think the main difference would be the point at which it was levied. In other words, a general sales tax is commonly thought of as being levied at the retail level while the excise tax, generally speaking, is considered to be applied at the manufacturers level. Are you in favor then of having lower income taxes and put more of the burden on the excise tax arrangement? No. We are in favor, as I say, of replacing. The revenue now brought in through the discriminatory system by a flat rate tax. Now, I will say this, that if it was possible later on to reduce income taxes, or to reduce taxes in general, I think that the first step probably should be the reduction of income taxes rather than the reduction of excise taxes. Are you in favor of the planned reduction in income taxes that I believe is supposed to expect next year? Yes, very definitely. Mr. Sly, the cost of living is going up, as we've seen by the recent indexes, and it looks as though labor will be asking for more money. Do you manufacturers propose any changes in the Taft-Hartley law? Well, we believe that the Taft-Hartley law, generally speaking, has been a good labor law. We think it can be a much better labor law than it has been through fair and impartial administration. I do think that it should be pointed out that it is only fair that there not be any monopoly in our economy, whether it be in business or in government or in labor. Was the final question, Mr. Sly, I'd like to ask you something. You started your own furniture business, I know, in the depth of the depression. Do you feel we're on the verge of a recession now? No, I certainly do not. And I decry those prophets of doom that are always trying to predict us into a recession or a depression. I can remember back in 1943, one of the labor leaders of this country predicted that immediately after World War II, there would be 15 million unemployed people in this country. Now, that has never come about, fortunately, and I see no reason today with the tremendous growth that lies before this country for any marked recession or deep depression. I think the main danger is psychological, and I think that if we will work for the future that we can attain, we will attain it, and I certainly hope we do. Well, thank you very much, Mr. Sly. It's a pleasure to have you here tonight. The opinions you've heard our speakers express tonight have been entirely their own. The editorial board for this edition of the Laun Jean Chronoscope was Larry LeSir and Kenneth Kramer. Our distinguished guest was Charles R. Sly, Jr., President of the National Association of Manufacturers. 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