Evening star., 1937-10-24
TOBACCO TAX PLAN
REVIVED IN C|TYS
HUNT FOR REVENUE.
D. c. Heads Consider Seven
Other Proposals to Balance
1889 Budget.
"LEAK" IN CONFERENCE
PROVOKES gag" ORDER
Commissioners and Members of
Special Committee "Muzzled."
Levy on Foreign Firms Studied.

BACKGROUND
A sales tar to meet the Districts
urgent financing needs wdS advo-
Gated during the lsat session OF
Congress, but tUaS abandoned on
theory it tDoudl place burden on
those least able to pay. A business
privilege tar and boost in the
real estate leuy were substituted,
but they hare met rigorous protest.
A special sales tax on cigarettes and
other forms of tobacco was revived
suddenly yesterday as the Commis-
sioners continued to seek panacee
for the Districts prospective ts*
dilemma in the coming fiscal year.
Since the widely denounced bus
ness privilege tax and the 25-cer
raise in the real estate levy are to ex-
pire automatically on June 80, the
District faces the problem of finding
new source of at least s5,000000 in
revenue to balance the proposed 1889
budget.
The tobacco tax was injected into
the puzzling tax picture at stormy
two-hour session between the Commits
sioners and their Special Tax Com
mittee of six District officials.
Seven Other Plans Considered.
The Commissioners and the Tax
Committee also considered Seven other
proposed forms of taxation, but failed
to make a definite selection of the
ones Congress will be asked to ap-
prove. AS a result, the Tax Commit
tee was instructed to resume its
studies and return with program
showing what each of the proposed
tax plans might yield in additional
revenue.
The joint conference was marked
by verbal explosions for nearly an
hour, these resulting from so-called
"leak" over the committees behind
cloeed-door deliberations. The out
come was application by the Conmis-
sioners of a rigid gag" order.
Hereafter, no one at the District
Building, except the Commissioners
themselves, they said, may talk about
the activities of the Tax Committee.
The clamp is so tight even Commits
sioner George E. Allen declared he
had been "muzzled."
Randolph for Sales Tax.
Meanwhile, it was learned that
adoption of a sales tax, to replace the
business privilege levy. will be advo-
Gated in the coming session by Rep
resentative Randolph. Democrat, Of
West Virginia, one of the most active
members of the House District Com
mittee.
Declaring the business privilege tax
"a very serious mistake" Randolph
agreed with Chairman Palmisano of
the District Committee as opposed to
Representative Kennedy, Democrat, OF
Maryland, who is drafting new tax
bill for the District.
A sales tax on tobacco was first
proposed nearly year ago as po-
tential source of additional revenue,
but ultimately was discarded for other
forms of emergency taxation which
Congress adopted to keep the Dis
trict out of the red in the current
fiscal year. At that time, there were
rough estimates showing 2-cent sales
tax on cigarettes alone would pro-
duce about 100000 a year. Inclu-
sion of pipe and chewing tobacco ar
cigars, it is believed, would incres
the return to s1,0O0,000 a year.
May Tax Foreign Firms.
The Commissioners also have re
vived the proposed tax on foreign
corporations doing business in Wash
ington as another possible source of
revenue. Like the tobacco tax, it was
considered last year and abandoned.
The other tax plans considered were:
/. A general sales tex Of / and ?
per cent.
Q. Revision and continuation of the
business privilege tax.
8. An income tax.
4. An increase in the real and pc
sonal property tax above the ST.
base.
S. A special sales tax on beer.
s. An increase in the tax on publ
utility corporations.
Just prior to yesterdays conference