Evening star., 1937-06-13
Continued From First PaRe.)

Jor, WnOleSaler or JoDper or professional worker
would be able to pass along the tax to the
buying public. This brings declarations from
students Of the bill that the business privilege
ak as sales tax In disguise. Some of the tax
payers, however, it is suggested might not be
able to transfer the tax burden. because of
competitive or technical reasons
Board of Trade Holds Plan Inequitable.
The Board OF Trade, after serious study Of
proposed fiat rate levy inequitable and un-
workable, and has declared it probably would
prove contlscatory In some instances, as for
instance In the case OF businesses operated on
narrow margin of profit.
Whereas advisers of the House District
Committee have estimated" the levy would
bring in some 900 in additional revenue,
indices show the yield would be from S. 100000
to 100000. 1t bases this estimate on reports
compiled by the Census Bureau in Its 1895
census of business and manufacturing in the
District.
The bill was drafted almost overnight by
the Commissioners Tax Revenue Committee,
acting under directions of the Tax Subcom-
mittee of the House District Committee This
was ordered when members of the House sub
committee objected to the straight sales tax
suggested by the Commissioners in lieu of an
income tax and business gross receipts tax.
Critics of the bill as now drafted turn to
the finance business in Washington for one
indication Of the possible inequities in the bill
They cite this illustration: Company A is en-
gagged in financing the purchase Of automobiles
by retail agency. The finance house borrows
money from banks at per cent 1t makes
loans to the automobile agency on short terms
gross margin. But as the agency repays the
loan, the finance house must account for the
return of the total sum, including interest, as
gross receipts on which it must pay the rate of
3-5 of per cent. But this same money may
be turned over as many as eight or nine times
within one year. Each time the loaned fund
comes back to the finance house. it is added
to the gross receipts on which the tax is ap-
piled. In other words the critics OF the bill
say the faster the money is turned over the
more NOR the tax will be- Here, again, is seen the
piled to finance business in New York, and
all types OF business taxed under the West
Virginia privilege levy and the gross receipts
levy proposed for the District.
Questions also are being raised as to how
the fiat rate levy would be applied here to the
transactions involved in the development and
sale of houses and other real properties or to
a realty firm engaging in property management
for other owners
Bill Has Many Enforcement Teeth.
No authoritative answer could be obtained
at the District Building.
The bill packs a number OF teeth to enable
agents of the Commissioners to force the licens-
ing of business and professions the making of
annual statements of gross receipts, the pay
ment of the license fees and the levy on the
gross receipts
No person may operate in his business or
profession without license. license is good
for but one location Chain stores would have
to pay the $40 fee for each store. The Com
nlissioners are empowered to revoke licenses for
the failure OF the owner to file the required
annual returns, for the failure to make
rectlonS of statements in return or for failure
to pay the fee or the tax.
For failure to comply with any of the rules
OF the Commissioners or the act, the bill pro-
vides fines ranging up to $1,000 for each failure
refusal or violation, and for every day the fail
ure, refusal or violation continues
Failure to make payments due in Septem-
Der and March would bring penalty of l per
cent month of the amounts due and If the
taxed person failed to file return on the
specified time he would be subject to penalty
of 10 per cent of the tax due, plus per cent
OF the tax for each month of delay.
II a return were not filed, the assessor
would have power to make mandatory assess
ment from such information as he may be able
to obtain and, if necessary, he could estimate
the tax on the basis of external indices such as
the number of employees of the person con-
cerned, rentals paid by him, stock on hand and
other factors.
Books May Be Examined
This is not yet all. The bill provides the
Commissioners or their agents may examine
hold hearings, take testimony under oaths and
subpoena witnesses and records Further, the
bill provides: THE Bureau of Internal Revenue
*'' is authorized and required to supply such
information as may be requested by the Com
missioners relative to any person subject to the
taxes imposed under this title
Specifically exempted from the terms of the
business privilege bill are national banks and
trust companies, which now pay tax OF per
cent on gross receipts; the gas company, which
pays gross earnings tax of per cent; the
telephone company, which pays per cent on
gross receipts; the power company which pays
per cent on gross earnings; savings banks,
which pay per cent on gross receipts less
interest paid to depositors; building and loan
associations, which pay 2 per cent on gross
receipts, and bond, surety and title companies,
which pay " per cent on gross receipts
Income Tax.
Estimates of Yield:
Original estimate of Collins bill So, 900 900
House committee estimates -----$ 81 900 900
Independent expert estimate ---- So, ,7000 900
Method and Rate of Tax:
This levy is on net income of both resident
earned in this city. Rates on individuals run
on a sliding scale from per cent on net income
not over $4,000 to per cent on net income over
$4,000. Exemptions include 81, 900 for single
individuals, 81, 500 for married couples and $400
for each dependent. Corporation tax Is per
cent on net income.
Comment:
Originally proposed as a substitute for the
Intangible tax, the income tax is proposed now
as an additional tax, with the Intangible levy
being retained and strengthened. The reason
for this Is the fear that the income tax may be
lnvalldated In test on constitutionality.
AS written, the income tax bill invites COM
pex dif11culties resulting from new problems
against reappropriatng unobgated grants for non-F
ha1n