Evening star., 1935-01-20
RETROACTIVE TAX
PROPOSAL SCORED
Democrats Challenge Nice's
Plan to Levy on 1884
Incomes.
BY GEORGE PORTER,
STAR CORRESPONDENT of The Star.


ANNAPOLIS, January 19-Can
Maryland make the income tax pro-
posed by Gov Harry w. Nice retro
active so as to apply to 1884 income?
This was one of the questions upper
most in the minds of members of the
General Assembly as they returned to
their homes for the week end to
Sound out" sentiment regarding the
executives suggestions as laid before
the Legislature this week.
When they go back to the State
House Tuesday night they hope Mr..
Nice will be able to modify his tax
plans, for he is to confer with Federal
Relief Administrator Harry L. Hopkins
on Monday in an effort to get Federal
authorities to agree to lower the
amount of relief funds the State has
been told to raise.
S7,2O0,OO0 Taken as Total.
Gov. Nice used S7,200,O00 as the
amount Washington would require
Maryland to contribute for relief in
calculating the extraordinary expenses.
including the cost of old-age pensions
and unemployment insurance. which
the State must raise during the next
two years. The expenses aggregate
$11,050,000.
The Governor suggested that the
money be obtained through State
income tax at one-half the Federal
rate, increased gross receipts taxes on
public utilities. larger inheritance
taxes and new race track taxes.
Bills embodying those proposals
have. been introduced in both houses,
that authorizing the income tax being
made an emergency measure for the
purpose of having it apply to 1884 in
comes. Under its terms. Maryland
taxpayers would be required to file
with the State Tax Commission a
duplicate of their Federal income tax
return by March IS.
Democrats Challenge Plan.
Democratic legislators have chal-
lenged the legality of such statute
and the Governors advisers admit the
question probably will have to be set
tied in court.
1t has been calculated that if Mary
land had to raise $11 1,050 900 by direct
taxation the present State tax rate OF
% cents would have to be boosted to
6S12 cents per $100, an increase OF
46la cents.
LAS this form of taxation falls prin-
cipally on land and improvements, a
class of property already overburdened,
cannot consider or countenance such
a course" Gov Nice commented.
In addition to the four forms of
taxation suggested by the Governor
and provided in the administrators
bills, MIR. Nice pointed out that part
of the relief burden might be borne
by long-term bonds. If bonds are is
sued by the State, however, provision
for a direct tax is essential, he noted.
Other Methods Shown.
Bonds might be issued by the Board
of State Aid and Charities. or other
governmental body empowered to is
sue bonds or debentures, however, and
the carrying charges financed through
racing, gross receipts, sales, income or
other special tax, without increasing
the property tax.
A precedent for this was set in 1888,
Gov. Nice explained. when the State
Roads Commission was authorized to
issue 100000 of it's own bonds to
be paid for from license fees and
franchise taxes on commercial We
hicles.
Gov. Nice also directed the legis-
lators' attention to the $90,OO0,O00 an
nuity of the Northern Central Rail-
road, which might be disposed of, If
necessary. to meet immediate needs.
If a disposition can be made at a
rate more advantageous than the rate
at which the State could borrow the
money, it might be well for you to
consider seriously the question OF dis
posing of this annuity" he said.
The Governor made no mention Of
sweepstakes or of renewing the tolls
on Susquehanna bridges, two methods
of raising relief revenue which have
been widely discussed. His failure to
refer to them is regarded as indica-
ton he does not approve either
method.