When Congress convenes next month, one of its first jobs will be the imposition of new liquor taxes. They will have to be high enough to compensate for the emergency tax schedule in the National Recovery Act which President Roosevelt declared inoperative with Repeal. They will have to be low enough to make bootlegging unprofitable. First official intimation of how this delicate balance might be effected came last week from a special interdepartmental committee which handed the President a set of proposed liquor rates. The committee suggested:
Increasing the Federal tax on spirits from $1.10 a gal. to $2.60.
Increasing the low-powered wine tax from 4¢ to 16¢ a gal. while running the tax on high-powered wines up to $2.60.
Decreasing the levy on full-strength beer from $6 to $5 a bbl.
Decreasing the surtax on rectified spirits (cut liquor) from 30¢ to 16¢ a gal.
Estimated annual revenue: $500,000,000.
To prevent strapped States from piling additional imposts on liquor, the President was counseled to waive in their favor all Federal claim to "occupational" licensing fees on breweries, distilleries, wineries. Likewise it was suggested that the Treasury collect all gallonage liquor taxes at one time and divide up with the States later.
Comment on these proposals, when they were forwarded to Congressional Committees, was not immediately favorable. Wets felt the rates were so high that the 'legger could continue operation. Drys complained that the rates were still too low to encourage temperance.