Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-02
INCOME TAX BILL
STUDIED BY GROUP
Proposal Is for Substitute
Levy to Raise Revenue
rs Per Cent.
BY J. A, O'LEARY.

Substitution of a local income tax
for the present tax on intangible per-
sonal property would result in the peo-
pie of the District paying several hun
dred thousand dollars more than they
now pay on intangibles under one plan
of income tax which has been pre-
pared by request for the consideration
OF the ngreSsional committee inQuir-
ing into fiscal relations and local tax
alton.
Nothing definite has been determined
yet as to revisions in the local tax
system, but this has been mem med
with other possible changes likely to
be debated, and local officials, at the
request OF the committee. Fave been
gathering data and considering the
effects of the various possibilities.
Tentative Schedule Set Up.
1t is understood that if Congress
should consider an income tax as a
substitute for the intangible tax. the
local experts consulted would prefer in
come tax rates graduated substantially
as follows: On net income up to S10.-
600. rate of per cent: above $4,000,
but not over $4,000, per cent; in ex-
cess of $4,000. 3 per cent.
For the fiscal year 1880 the District
collected from the existing tax on in
tangible personal property a total of
S2,725.941. Local officials estimate that
an income tax in place of the intangible
levy would take from District taxpayers
somewhere between 10 and IS per cent
more revenue. On conservative esti-
mate, therefore, it would bring in more
than $3,000,000.
The present intangible tax law places
tax of flve-tenths of per cent, or
SIS per $1,000. on moneys and credits
including stocks and bonds, with GER
tain exceptions and exemptions. One
provision of the present law is that
savings deposits of individuals not in
excess of $500 deposited in banks, trust
companies or building associations. sub
ject to notice of withdrawal and not
subject to check, are exempt.
Exemptions Are Problem.
An important phase of local in.
come tax law aside from the rate of
tax, is the question of what exemptions
should be made and where deductions
in determining the net income to be
taxed.
1t is understood that if an income
tax is proposed In Congress the local
authorities would suggest the same
personal exemptions carried in the
Federal income tax law, namely: For
married persons, $500. with S400
allowance for each child; for single
persons, or married persons not living
together $1.500
They would also recommend the usual
deduction for contributions made during
the year for religious, charitable, edu-
cational or benevolent purposes.
Another deduction which would be
suggested would be the amount of taxes
paid to the United States or the Dis
trict, except taxes for bettermentS as
Sessed and those against local benefits
that increase the value of the property.
Would Free Property Repairs.
Money spent for repairs to real estate.
in reasonable amount, is another item
of deduction to be considered in work
ing out a local income tax.
Local officials also would favor de-
duction of interest on unsecured In
debtedneSS. On secured Indebtedness
one proposal being considered is to al
low deduction of interest to the extent
that the security was taxed as real or
personal property.
With regard to interest on money de-
posted in building associations, trust
companies or savings banks, not subject
to check. the suggestion has been ad-
vanced that where the amount on de-
post is not more than 81 900, it shoulI
be exempt, but the income from
amounts above 81 900 would be taxable
under an income tax.
One provision suggested for consid-
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