Evening star., 1937-05-29

Dtscdrding proposals for sales
tar, q special tar subcommittee OF
the House District Committee has
recommended an income tar for
the District to help meet q threat
ened deficit OF some So, 900, 900. The
local income tar, II finally enacted,
tDtll be the first Washington resi-.
dents hare paid. The expected
deficit resulted from an increase in
governmental costs and reduction
OF Federal contribution.
Rates to be incorporated in the Dis
tricts proposed income tax bill prob
ably will range from to per cent
on net income, according to tentative
decisions reached today by the Com
missioner's Tax Revenue Committee.
The objective of the committee is
10 suggest rates calculated to produce
S2,OOO,OO0 from an income tax as
part OF the budget-balancing revenue
program which the Commissioners
nave been ordered to complete by
Tuesday morning, when 1t is to be
submitted to the tax subcommittee OF
the House District Committee.
The group Of District officials en-
phasized that no final decision has
been reached, but they are planning TO
write into the bill personal exemption
OF $1,000 for single persons and an ex-
emption of $4,000 for married persons
living with husband or wife and an al
lowance of $500 for each dependent.
These tentative plans are substan-
TALLY the same as considered by the
Commissioners about two weeks ago,
when they first suggested an income
tax to the House committee as a means
of meeting much Of the impending
1888 deficit.
District officials said they had not
yet determined whether the income
tax rates for corporations would be the
same as that applied to individuals or
whether it would be fiat rate as has
been suggested in the past.
Meanwhile. indications were that
District officials may recommend
levy Of one-half Of per cent on the
gross receipts of business. The busi-
ness privilege tax is now designed to
be the major element in the revamped
program.
Final decision has not been
reached on the rates, but 1t was re-
called that when the commissioners
committee at first considered the
business privilege tax there was a
suggestion Of rate Of 05 per
cent on gross receipts, expected to
produce about s3,0o0,o00. This is the
sum which the commissioners now in
tend to draw from a tax on business
gross receipts.
Earlier it had been suggested by
some that the business privilege tax
be per cent on gross receipts, which
would bring into the Districts needy
treasury s6.00o,000. but with the de-
| cision of the House subcommittee to
invoke a District income tax law,
so much will not be needed from the
business tax.
The Commissioners are under orders
from the House group to have the re-
vised program completed and ready
for action not later than Tuesday
morning
The need for speed is due to the
fact that so little time is left prior
to July /. the beginning Of the new
fiscal year.
Temporary Loans.
District officials have emphasized
again that even if the program as
outlined in broad terms by the House
subcommittee is speedily passed by
Congress, the District still will re-
quire authority to make temporary
loans from the United States Treas
ury in order to meet current bills. at
least in the earlier part Of the new
fiscal year.
Details of the income tax measure
have not yet been completed by the
Commissioners Committee, but the
| present thought is that it would be
the part of wisdom to make the Dis.
trict income tax returns due by March
Is, the same date as applies to the
There would be two advantages to
the plan, according to Corporation
Counsel Elwood H. Seal. One would
be simplicity of the obligation to be
placed on the taxpayer. The second.
and the more important to the Dis
trict tax collector, would be that the
District would be afforded an excel
lent opportunity for a close compari.
son Of the District and Federal re.
turns. In other words, the District
would be able to check carefully and
accurately to determine If any District
residents had failed to pay all the
income tax due the municipal govern
ment
But such a plan imposes the DIM
Guilty that the income tax receipts due
the District would not be collected until
after next March, on the incomes Of
District residents during the calendar
year ending next January I. The
crying need Of the District now Is to
have funds with which to meet the
bills which will accrue beginning July
/. This is offered as an especially
urgent need for permission to obtain
advances from the United States
Treasury in the next fiscal year. pend
ing tax collections, If the income tax
Is to be one OF the major elements
Of the Districts budget balancing
revenue program.