"Beat the Tax"

It looked like the biggest binge since Repeal. All over the nation last week, thousands of customers rushed to liquor stores to stock up as fast as their pocketbooks would allow. The reason for the buying spree was summed up by the ads: "Beat the tax!" In San Francisco, Weinstein's retail chain reported sales ten times its normal October business and far above even the best Christmas season. In Chicago, Marco's liquor store doubled its sales staff. In Manhattan, dealers refused to take telephone orders, stayed open far into the night.

Not only liquor had gone up. With the new excise taxes, cigarettes jumped a penny a pack, gasoline 1/2-c- a gallon, autos anywhere from $30 to $105. Because of a quirk in the tax law, the actual price rises in many cases were far higher than the new taxes themselves.

The quirk is an amendment of Florida's Democratic Representative Albert S. Herlong, which stipulates that merchants be allowed their usual percentage markups. Thus, in cases where taxes have traditionally been considered part of the cost of a product (e.g., liquor, sporting goods, electric appliances), the wholesale and retail markups are still figured on top of the new excise taxes. The actual tax boost on a fifth of blended whisky, for example, is 26-c-, but the new retail price of some brands is up as much as 40-c-. A refrigerator that retailed for $175 before the tax would now rise $17.50 v. the actual tax boost: $10. By the same token, a former $2 can of tennis balls now costs $2.35. Actual tax increase: 6-c-.

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