Evening star., 1937-06-12
Member Of the Aseociated Press.
An Unfair Tax.

So much discussion has been given
the question whether members of Con-
gress must pay the local income tax
that would be imposed on other Federal
employees by the bill now before the
House that little attention has been
given to examination OF one of the
companion tax measures.
This odd piece Of tax legislation, one
Of the schemes incorporated in the
omnibus local tax measure expected to
come before the House on Monday,
parades under the name of TAX on
Privilege Of Doing Business" 1t is more
than that. 1t is not merely tax on
the privilege Of earning an independent
lving-as distinct from earning living
BY working for the Government or for
somebody else-but is concealed sales
tax so badly drawn and so inequitable
In Its application that it has bare
chance of survival under the scrutiny
Of Congress.
The bill places a $40 license fee on
everybody carrying on business within
the District of Columbia, the term busi-
ness including:
The carrying on or exercising for
gain or economic benefit. either direct or
indirect, any trade, business, profession,
vocation or commercial activity in the
District of Columbia, not including,
however. labor or services rendered by
any individual for wage or a salary
In addition to the $40 privilege tax
for earning living and not going on
relief, the taxpayers affected must pay
q three -f1fths Of one per cent tax on
gross receipts. AS the bill affects indi-
Nduals, from Steve, the peanut vendor
on the White House corner, to the citys
leading professional men, it contains
curious inequities. A lawyer in practice
for himself, for instance, and able to
earn $500 q year, must pay q tax
on his gross income and Tor the privilege
Of practicing law. But The lawyer who
works for the Government at twice that
salary and helps draft schemes to add
more officeholders to the public pay roll
escapes the tax entirely. That is merely
one of an almost endless number of
Inequalities in application of the tax to
individuals.
More inequities are threatened in the
bills application to business. In some
classes of business the tax would merely
be passed on to the consumer. But in
other classes OF business the tax would
have to be absorbed by the taxpayer
and would work unwarranted hardship
on some Of them. Whether the Board
Of Trade is correct in its belief that
the tax would be conflscatory and put
some small businesses out Of operation
entirely cannot be known definitely at
this time. But an arbitrary, single-rate
tax on gross receipts, regardless of ex-
penses and regardless of the kind OF
business that is taxed, is plainly an out
rageous proposal that will not be ap-
proved by Congress.
AS example of the manner in which
this tax is proposed lies in the esti-
mates OF its revenue-yield. Ask any
body at the District Building where
the estimates came from and the answer
will be vague shrug. Ask any member
OF the tax subcommittee where the esti-
mates came from and one is directed
to the District Building The committee
estimate was that the bill would produce
close to $4,000, 900. The Board of Trade
estimate, using census data, places the
yield at twice that sum. 1t is a de-
plorable condition that finds a COM
munity OF unrepresented taxpayers at
the mercy of such reckless taxing
methods, with little if any attention
being paid to the amount of the total
tax burden they must shoulder.
There is much to be said in favor of
straight sales tax, as the self taxing
voters in an increasing number OF the
States are finding out to their advantage
and satisfaction. But in this privilege"
tax there is the same resort to the old
subterfuge of hiding a sales tax under
another name, very poorly drawn,
1nequitable sales tax at that.
II We are TO have a sales tax. as A
majority Of the States have, let 1t be,
frankly, sales tax, fair in its appli-
cation, eXempting necessities, avoiding
the obvious inequities OF this pending
measure, the enforcement of which will
require additional legions of new office
holders and the purposes OF which are
artfully concealed under the fetching
title-"A Tax on the Privilege OF Doing
Business"