The CHAIRMAN. Thank you, Mr. Singer, for bringing to the committee the views of the American Automobile Association. We appreciate your statement. The next witness is Arthur K. Spatz. Come forward, Mr. Spatz. You may proceed. STATEMENT OF ARTHUR K. SPATZ, SECRETARY-TREASURER, ARKANSAS BAKERS ASSOCIATION, AND VICE CHAIRMAN OF THE ARKANSAS HIGHWAY USERS CONFERENCE Mr. SPATZ. Mr. Chairman and members of the committee, my name is Arthur K. Spatz. I am secretary-treasurer of the Arkansas Bakers Association and vice chairman of the Arkansas Highway Users Conference. The bakers association is a member of the Highway Users Conference, which represents over 30 organizations in Arkansas who depend on the highways in whole or in part for transportation of their goods in trade. We appreciate very much the opportunity to appear before your committee to make clear our position of opposing any further increase in the Federal gasoline tax and to suggest or support other possible solutions to the financial dilemma the Bureau of Public Roads find itself in after only a short time of spearheading a very ambitions and costly roadbuilding program of only 41,000 miles within the borders of these 48 continental States. At this time we would like to pay our respects to your chairman, the Honorable Mr. Wilbur Mills, who represents the Second Congressional District of Arkansas, composed of 13 counties. His district as well as the entire State is proud of him and his record in Congress, and the highway users requested me to bring this greeting and salutation. There are 6 congressional districts in Arkansas, composing 75 counties. The interstate or super highway of 525 miles transverses some 20 of these counties and Mr. Mills' district has only 35 miles of this road, which is the least mileage of any congressional district in the State. The Arkansas Highway Department first estimated the road could be built for around $300 million and then raised its final estimate to $401,267,000. Another estimate is to be made next year, which probably will raise this figure by several million dollars. The first and most important reason the highway users in Arkansas are objecting to increasing the Federal gasoline tax is because the several States have developed, over the years, this source of revenue to build their own roads. The Federal tax on gasoline was first enacted by Congress as a temporary emergency measure to supplement its general revenue. If Congress continues to raise this class of tax, which should be reserved for the States exclusively, it will become more difficult, as the years pass, for the States to depend on this tax for building roads. Therefore, they will be forced to ask Congress to reduce their contributions formula for all roadbuilding systems. We hear a lot these days about inflation, cost of living, skyrocketing prices, and so on. Another increase in gasoline tax is a positive way of spinning the wheel a little faster. We seriously doubt if taxes can ever be raised high enough to meet the demands of public spending. Certainly the manufacturers of gasoline can do nothing but pass this increase on to the wholesaler; he in turn to the retailer and on down to the ultimate consumer. There is only one person who cannot pass it on and that is the overtaxed individual motorist. In the baking business we will pass it on by increasing the cost of a loaf of bread. The trucker will increase freight charges. The taxicabs will increase their fares. The cost of all food will go up again just for the sake of pretending to operate one Government project on a pay-as-you-go basis. When the gasoline tax was first imposed, along with other high excise taxes, the taxpayers were led to believe that the whole governmental financial structure would perish unless the budget was balanced by these increased taxes. This was over a quarter of a century ago and since then it is doubtful if the problem of balancing the budget has concerned as many serious-thinking people as it should. We are saying all this to lead up to supporting some of the proposals already advanced to alleviate the temporary financial dilemma the Government finds itself in today in its gigantic roadbuilding program, without imposing additional taxes at this time. First and foremost we support the proposal to use Federal tax moneys from the Federal general fund and not from additional highway-user taxes to build the Federal defense highway. The advocates of this superhighway program very emphatically impressed on Members of Congress that it was to be a national defense and safety program. It has been conservatively estimated that when the system was completed it would save the lives of at least 4,000 people per year; it would be used to evacuate city people to the country in time of an emergency and would be so constructed that airplanes could land and take off on it. The National Safety Council estimates the economic loss of a human being in an automobile wreck to be $150,000. Multiply this amount by 4,000 and it means an economic saving to the country of $600 million per year. Plain economic reasoning supports the need for using defense money and speeding up the program rather than retarding it with more burdensome taxation. Federal gasoline tax in reality is only another general excise tax and like all other Federal taxes is not related to Federal highway aid. Tax money spent by the Federal Government in States, regardless of what it is spent for, should be for the good of everyone. Building roads is no exception. Good roads benefit everyone the landowners, speculator, real-estate man, laborer, contractor, machinery people, building-materials man, insurance, newspapers, bondsmen, steel, concrete, asphalt, cities, towns and country, and, in fact, everything and everybody including the tax collector and Government worker. So nothing the Government does here at home is more important, even to its building of dams, defense spending, and its extensive welfare and foreign aid program. Secondly, we join the proposal of the American Automobile Association in its suggestion of using short-term revenue bonds for a limited period to provide additional quick money. It is our understanding the Federal Government frequently offers bonds to the pub lic for financing its operation and in this instance no finer cause could be found for resorting to this proposal. We see nothing gained by advocating an extension of existing financing and construction periods for the present Federal highway program because we believe the program is off to a good start and that the shaky financial problem is only temporary. We have seen instances in Arkansas of the highway department being required to spend large amounts of money on expensive right-o-ways which is being charged to construction costs. Actually, the roadbuilding contractors in our State are bidding far below highway estimates. The excuse that higher contractor bids are responsible for the dilemma is a misnomer. As our exploding population buys and drives more automobiles, the increased yield from the present excise tax on the sale of ever-increasing quantities of gasoline will contribute in substantial proportion to the financing of the Federal highway program. Increasing the rate of taxation would simply place another unfair burden on an already overtaxed segment of the American public. The Federal Government already recognizes the expediency of financing certain of its basic functions on a deficit basis. We believe that the Federal highway program, for the reasons I have discussed, is a basic function, too. For these reasons, the Arkansas Highway Users Conference urges this committee to recommend no increased taxation at this time. Thank you gentlemen. The CHAIRMAN. Our next witness is our colleague from South Carolina, the Honorable W. J. Bryan Dorn. STATEMENT OF HON. W. J. BRYAN DORN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF SOUTH CAROLINA Mr. DORN. Thank you, Mr. Chairman. It is my privilege to present one of the most outstanding constituents in the district it is my honor to represent. He is president of the South Carolina Highway Users Conference, representing 20 great organizations in my State. Mr. Murray Sadler lives in Abbeville County, that gave to the country John C. Calhoun. I might say, Mr. Chairman and gentlemen of the committee, that he is a Sam Rayburn-Wilbur Mills Democrat. The CHAIRMAN. Mr. Sadler, we are pleased to have you here. You could not say enough nice things about Mr. Dorn and the very fine representation he gives the State of South Carolina and the Nation here in the Congress. You are fortunate to have him here. You are recognized, sir, to proceed with your statement. STATEMENT OF MURRAY A. SADLER, CHAIRMAN, SOUTH CAROLINA HIGHWAY USERS CONFERENCE Mr. SADLER. Mr. Chairman and Members of the Ways and Means Committee, my name is Murray Sadler. I am from Donalds, S.C., and am here as chairman of the South Carolina Highway Users Conference. In appearing before this committee today, I am representing the following highway user groups: Association General Contractors. Atlantic Greyhound Corp. Carolina Motor Club. Carolina Ready-Mixed Concrete Association. Columbia Outdoor Advertising, Inc. Esso Standard Oil Co., Truck Division. Motor Transportation Association of South Carolina. Palmetto State Oil Marketers' Association. Portland Cement Association. South Carolina Association County Road Officials. South Carolina Automobile Dealers Association. South Carolina Dairy Association. South Carolina Farm Bureau. South Carolina Oil Jobbers Association. South Carolina Rural Letter Carriers. South Carolina State Chamber of Commerce. South Carolina State Grange. South Carolina State Motor Club. Textle Manufacturers Association. Every one of these South Carolina organizations is unalterably opposed to any further increases, in any amount and for any purpose whatever, in the Federal gasoline tax or other Federal taxes levied on highway users. Just 3 years ago, in 1956, the Congress raised the Federal gasoline tax to 3 cents a gallon and authorized the start of this great new Federal highway program. That increase was justified to the motoring public on the premise that it would help finance the program on a pay-as-you-go basis, without any need for further taxation. To insure the integrity of the plan, the highway trust fund was established and certain Federal automotive taxes, including the new 3-cent-a-gallon tax, were earmarked to go into the fund. That was yesterday. Today, the highway program is no longer on a pay-as-you-go basis, and motorists are threatened with another gasoline tax increase, whose justification this time is that not enough money is available to pay for the program. I am sure that others today have pointed out, or will point out, the heavy highway tax burden already borne by motorists all across the country. In South Carolina, our motorists are now paying over $150 a year per vehicle in special automotive taxes. More to the point, the Federal gasoline and other automotive taxes alone are now taking more than $40 million a year out of our State. Our motorists have never objected to paying their own way and have always been willing to bear a special highway tax load for the roads they need and use. No highway-minded person or organization could feel otherwise, but how much can they take? Forty million dollars a year is a staggering special Federal tax load for vehicle operators. Moreover, they are not getting a square deal on the money they already pay. We have not yet heard it denied that current Federal revenue from these taxes far exceeds the cost of the road program. The South Carolina Highway Users Conference and its member organizations strongly urge that all of this automotive tax money be dedicated. as it should rightly be, to roads. We are of the unequivocal opinion that our motorists not only pay more than enough for the roads necessary to their well-being, but that any added taxes on motor fuels would be utterly unjustified. I would like also to make one final point. We are totally unimpressed by suggestions that this tax might be increased on a "temporary basis." Twenty-seven years of experience with the Federal gasoline tax have demonstrated to us that there is nothing "temporary" about it. In our view, no case whatsoever has been made for any type of gasoline tax increase. The CHAIRMAN. Mr. Sadler, we thank you, sir, for coming before the committee. Mr. SADLER. Mr. Mills and members of the committee, thank you for your kindness in allowing me to appear here. I thank God that I live in a country where a man can speak his opinion and speak his mind and be heard. Thank you, sir. The CHAIRMAN. You came to the proper committee to do it. We always welcome a fellow speaking his mind before this committee, and we appreciate your being here. Mr. SADLER. Thank you. The CHAIRMAN. Thank you very much. Mr. IKARD. Mr. Chairman, I have received communications from Mr. Leslie R. Neal of San Antonio, Tex., a wholesale distributor, with respect to the matter before the committee and also with respect to the manner in which certain of these proposals will affect wholesale distributors of petroleum products. I request unanimous consent that these communications be placed in the record so that they will be available for all members of the committee. (The matter referred to is as follows:) Hon. FRANK IKARD, House of Representatives, Washington, D.C. SAN ANTONIO, TEX., July 23, 1959. DEAR SIR: Attached is a confirmation of my July 23 telegram to you which is self-explanatory. There have been presented some 10 bills designed to change the level at which the Federal gasoline tax is imposed from the time of sale by the supplier to the time of sale by the jobber. It would be appreciated if you would support the bill which you feel is the most appropriate to accomplish this change. Being a wholesale distributor (jobber) of Conoco petroleum products, we collect on an average of $40,000 of State gasoline tax and $24,000 of Federal gasoline tax per month. In Texas we pay this tax before the 25th of the following month after collection direct to the State comptroller. We should be allowed to remit the 3 cents per gallon Federal tax on a similar basis. You can see from the above figures that when we pay the Federal tax at the time we purchase our product, we have a considerable amount of our money tied up before we collect it from our customers, some of whom are sold on a 30-day credit basis. Would also appreciate your giving this important matter your support because you will be helping the small distributors throughout the country without causing any loss to the Federal Government. The jobbers are not requesting something special for their group, only to be treated the same as the large integrated oil companies. It would be appreciated if you would have the telegram as well as this letter included in the record of the hearings before your committee. Very truly yours, LESLIE R. NEAL. |