Re Federal tax on gasoline and diesel fuels. JOHN F. MARTIN & SONS, Mount Vernon, Wash., July 21, 1959. New House Office Building, Washington, D.C. DEAR JACK: With a present tax on gasoline of 62 cents per gallon for the State and 3 cents for the Federal Government it seems inconceivable to raise it more. Our business is such that to increase the tax can only curtail sales. Our profit, as a distributor, is only 2.6 cents per gallon on regular and 3.1 cents per gallon premium. It does not seem fair nor just for the tax on this product to be so much more than the profit that we make. Under present laws we pay the above tax whether we collect for the sale or lose the product by leaks, spillage accident, or evaporation. If taxes are increased, the least that could possibly be done, would be to change the level of collecting the tax by providing in the bill the provisions called for in the Harrison bill, H.R. 101. Your consideration of our request to work against an increase in Federal tax and if unable to defeat, to work for a change in the level at which the tax is collected will be appreciated. We would also like to request that this letter be included in the record of the hearings of this issue. Yours very truly, JOHN F. MARTIN. WILSON GAS & OIL CO., INC., Hon. OLIN D. JOHNSTON, Washington, D.C. DEAR SENATOR: Please have this letter recorded in the record of the hearings beginning on July 22, 1959, before the House Ways and Means Committee concerning increase in Federal gasoline taxes, as a vigorous protest against said increase. The petroleum industry of which we are a very small part is already carrying its share of the tax burdens, and the interstate roadbuilding program was promoted as a pay-as-you-go project and I sincerely believe will do that very thing at the present rate of gasoline tax; without thrusting upon our shoulders additional taxes at this time. Please do whatever is possible to prevent any increase, and should there be a necessity for any tax increase please have an amendment added including the provisions of the Harrison bill (H.R. 101) which would change the level of imposing all gasoline taxes, from the time of sale by the manufacturer to the time of sale by the wholesale distributor. Thanking you for your interest in this very vital matter, I am, Yours very truly, E. CLYBURN WILSON. CONDON OIL Co., Ripon, Wis., July 17, 1959. Representative WILLIAM VAN PELT, Washington, D.C. DEAR CONGRESSMAN VAN PELT: I wish to express to you my opposition to any attempt to increase the Federal taxes on gasoline during this session of the Congress. Seems to me it has been proven over and over again that the Federal highway program is an item of defense, and, therefore, should be paid for by all the people, instead of adding to an already overtaxed necessary item. If there is no way out-other than some compromise increase then you people on the Ways and Means Committee should certainly give us oil jobbers the same consideration the statutes now give to the major oil companies; namely to allow us to pay this tax to the Government in the same manner as they do. The Harrison bill (H.R. 101) and other similar bills would accomplish this purpose. I would like this letter to be included in the record of hearings on this issue. Sincerely, D. B. CONDON. U.S. SENATE, COMMITTEE ON THE JUDICIARY, Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR WILBUR: I am enclosing several letters recently received from my constituents expressing their opposition to any increase in the Federal tax on gasoline. You will note that they have requested that their letters be made part of your committee's records on this legislation. With all kind wishes, I am Sincerely yours, SAM J. ERVIN, Jr. E. J. POPE & SON, Mount Olive, N.C., July 17, 1959. Hon. SAM J. ERVIN, U.S. Senate, Washington, D.C. MY DEAR SENATOR: The purpose of my communication is to let you know that I bitterly oppose any increase, regardless of any amount, of Federal taxes on gasoline, diesel fuel, and special motor fuels. The taxes now, both Federal and State, constitute over one third of the retail price in my marketing territory. However, if despite my objections, the Federal increase is inevitable, then I would strongly urge for the provisions of Harrison bill (H.R. 101) changing the level of imposing the gasoline tax from the time of sale by the manufacturer to, the time of sale by the wholesale distributor be included. I would like for this communication to be included in the record of the hearing on this issue. Many thanks for your efforts, Sincerely yours, E. J. POPE, Jr. HOOKS & LAYNE OIL Co., Hon. SAM J. ERVIN, Senate Office Building, Washington, D.C. DEAR SIR: It is my understanding that hearings began today for the purpose of finding means to finance the Federal highway program. From all I have read on the subject recently, it appears that additional Federal taxes on gasoline are almost certain to be voted. I would like to register my strong opposition to any further increases in the Federal tax on motor fuels. In my opinion, there would be no deficit in the highway trust fund if Federal automotive taxes already being collected were not used to subsidize other functions of our Government. I believe the record will show that in the year ending June 30, 1958, a total of 42 percent of Federal automotive taxes collected went into the general fund of the Treasury instead of into the highway trust fund. If this diversion were eliminated, I believe it would be possible to reduce Federal gasoline taxes rather than being in the posi tion of attempting to increase them further. I will appreciate your serious consideration of this matter in the hope that you will see fit to oppose any increase in these taxes. I would also like to request that this letter be included in the record of the hearings on this issue. With kindest regards, I am Yours very truly, W. A. HOOKS.. MCMILLAN-SHULER OIL CO., INC., Hon. SAM J. ERVIN, Jr., Senate Office Building, Washington, D.C. DEAR SIR: I am writing to ask you to vote against any increase in Federal taxes on gasoline, diesel fuel, and special motor fuels. These products are a necessity, not a luxury, but they are now taxed higher than luxury items. The funds derived from the present taxes should be used for highway construction only, and not diverted to other uses. If this was the case, the present taxes would be adequate to finance construction of highways, and it would not be necessary to increase taxes on gasoline, on which taxes now amount to 43 percent of its price before Federal and State taxes. If a bill to increase Federal taxes on gasoline should be passed, regardless of our objections, it is imperative that the bill providing for such an increase include the provisions of the Harrison bill (H.R. 101) which would change the level of imposing the gasoline tax from the time of sale by the manufacturer to the time of sale by the wholesale distributor. It is unfair and it works a great hardship on small businesses such as ours to pay the tax before we sell the product. In our farm accounts we have so much of our working capital tied up in taxes (3 cents Federal tax, 74 cents State tax per gallon) for periods ranging from 3 months to a year. I humbly request that this letter be included in the record of the hearings on this issue. Thanking you for your grave consideration of this whole matter, I am, FLORENCE J. MCMILLAN. Cox OIL Co., Hon. WILBUR D. MILLS, Hot Springs, Ark., July 22, 1959. Chairman of the Ways and Means Committee, House Office Building, Washington, D.C. DEAR MR. MILLS: First, I wish to go on record as being unalterably opposed to increasing the Federal tax on gasoline for any purpose until such a time when the entire revenue derived from the present 3-cent tax is spent on roads 100 percent. If, however, you find that an increase in gasoline taxes will be passed regardless of objections, then I, as a wholesale jobber, plead with you to support Harrison's bill, H.R. 101, or some similar bill that will change the level at which Federal taxes are imposed. As it is now, I have to pay the Federal tax in advance to my refiner supplier upon receipt of invoice. There are no allowances made on this tax for ordinary losses due to evaporation, spillage, or casualty. In my experience in handling gasoline this loss will average at least 2 percent. Since my Federal gasoline taxes last month amounted to $4,890, which were paid in advance, it is simple arithmetic to arrive at a figure of $122.10 loss representing interest and evaporation loss due to Federal gasoline tax alone. I cannot believe that it is the intent of the Congress to impose any such hardship on small businesses such as mine. It is my information that the chief objections to changing the level at which Federal gasoline taxes are imposed comes from the internal revenue department. If you will refer to their form 720, a copy of which is attached for your convenience, you will note that they already have the forms and the facilities for handling this tax from any source. The return on this tax form from bonded State distributors could be very simple indeed. I think it is high time that this Government department be made to realize that they are working for the taxpayers and not the taxpayers working for them. I trust that I have made myself clear and that I am not overzealous on the subject. I know from the past that you will use your very best judgment; therefore, a reply to this letter is unnecessary. With the kindest of personal regards, I am, Yours very truly, JESSE E. Cox. U.S. SENATE, COMMITTEE ON APPROPRIATIONS, July 20, 1959. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, DEAR MR. CHAIRMAN: I am taking this occasion to furnish you with the enclosed communication sent to me by the State road commissioner of West Virginia regarding the jeopardy in which the Federal aid highway construction program in West Virginia may be placed in the event suitable Federal action is not forthcoming to ensure continuation of the program. The information, I believe, should be at hand for the consideration of this program, scheduled by your committee for July 22. With kind regards, ROBERT C. BYRD. THE STATE ROAD COMMISSION OF WEST VIRGINIA, Hon. ROBERT C. BYRD, We have previously advised that we will award our last contract on the Interstate System by around January 1, 1960, if no apportionment is made for the 1960-61 fiscal year. We have estimated that there will be approximately $96 million of highway investment idle for at least 2 years if the program is interrupted. Even more serious is the language in the 1960 fiscal year Commerce Department Appropriation Act which would limit reimbursements to the States on Federal aid participation projects to the amount of money in the trust fund. The Bureau of Public Roads has estimated that at the present rate the surplus in the trust fund will be wiped out this fall and as a result reimbursements to the States will have to be delayed. This is a disastrous situation and if not clarified and remedied will necessitate immediate discontinuance of any further contract lettings, stopping of all right-of-way acquisition, cutting all State maintenance work to emergency work only, and possibly halting payment to contractors on contracts already in force. The In the past when an apportionment was made to the States it has been assumed that Federal moneys would be available for reimbursement upon call. Binding contracts have been awarded by the State to contractors on the assumption that immediate reimbursement of the Federal share was assured. State road commission operates on an expenditure type budget; a budget not based on the amount of contracts to be let but based on the amount of expenditures that will be made only during the year. The revenue in our budget from Federal aid is based on the amount of money that will actually be requested for reimbursement during the year. Any change in that revenue estimate as a result of delays in obtaining Federal reimbursement would create a disastrous effect on our road program. This fact can be readily understood when one considers that Federal-aid reimbursement during the year ending December 31, 1959, will make up approximately 50 percent of our total revenue. The language in the 1960 fiscal year Commerce Department Appropriation Act, limiting reimbursements to States to the amount of money in the trust fund, coupled with the knowledge that the trust fund will be $500 million short by June 30, 1960, of meeting its obligation to the States, places the State road commission in a difficult position. It is feared unless Congress takes immediate action or advises the State of what to anticipate that the West Virginia road program will have to be halted. Action must be taken by Congress to eliminate the deficit in the trust fund or make other provisions in order for the State to have assurance that funds will be available upon call. Sincerely yours, PATRICK C. GRANEY, Commissioner. U.S. SENATE, Washington, D.C., July 27, 1959. Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, DEAR WILBUR: Although you have concluded your hearings on highway financing, I am sending a copy of a letter and other material which I have received from the Utah State Road Commission. As you will see, unless this State receives some assurance within the next 2 weeks that funds will be available, the road commission must stop $20 million worth of construction projects. I sincerely hope that the Ways and Means Committee will consider the facts set forth in the enclosed material as you mark up your bill. With kindest personal regards. Sincerely, WALLACE F. BENNETT. STATE ROAD COMMISSION OF UTAH, Senator WALLACE F. BENNETT, Washington, D.C. DEAR SENATOR BENNETT: Since our previous letters to you on the subject of the effect on Utah's road building program if Federal funding were suspended, additional complications have arisen. Our commission was informed by Federal highway officials at the Western Association of State Highway Officials Convention in Billings, Mont., June 21-26, that the trust fund would be depleted next spring, perhaps as early as February of 1960. They indicated that from that point on the Bureau of Public Roads would be unable to honor our vouchers even though the work had been programed previously and work was underway. Rather than place ourselves in an untenable financial dilemma, the commission met and decided that no more Federal aid participating work would be advertised. However, those projects which were advertised prior to the decision and those projects that had progressed through bid opening would proceed as scheduled. It was felt, and careful study of our total financial picture indicated, that those obligations could be met by the commission within the February deadline. Some small State projects requiring no Federal moneys were exempt from these new restrictions. This announcement met with considerable consternation on the part of the contractors. However, the commission could not see its way clear to any other course of action that was consistent with its imposed legal restrictions and financial responsibilities. The recent exchange of letters by Mr. A. E. Johnson, executive secretary of American Association of State Highway Officials and Mr. B. D. Tallamy, Federal Highway Administrator, copies of which are enclosed, indicate that the Federal financial picture is even worse than related at the Billings convention about a month ago. Mr. Tallamy states that the depletion of funds and the holding up of our vouchers will begin this fall. A subsequent phone conversation with Mr. Armstrong has led us to believe that October 15 will probably be the termination date for reimbursement of our vouchers. In actual practice this will mean that any expenditure by the contractor after September 1-15 will not be reimbursed. The required procedure requires that the contractor make actual payment for materials and labor and submit vouchers to the road commission in the form of pay estimates and, after checking, receive payment for the amounts shown. The road commission then (and not before) may submit vouchers to the Bureau of Public Roads, supported by evidence that actual payment has been to the contractor, and in time receive reimbursement. These procedures require at least 30 days and in some cases as much as 60 days. Thus, the dilemma becomes even more critical. Unless there is some assurance within the next 2 weeks that reimbursement can be made after October 15, 1959, we must begin shutting down some $20 million worth of construction projects throughout the State. All of this will be at added cost to the contractor and the State. And all at the time of the year when ideal construction weather prevails. Since the commission action imposing the first restrictions, already referred to, and the receipt of Mr. Tallamy's letter dated July 13, 1959, we have opened 44357-59- -32 |