Evening star., 1937-05-05
Definite Program Sought at
Tuesday Session-To
Sift Suggestions.
MOTOR AND INSURANCE
LEVIES IN FOREFRONT
Kennedy Hopes Increase in Real
Estate Tax Can Be Avoided
if Shortage Is $8,000,000.
BY JAMES E. CHINN.

Puzzled as to what additional taxes
to impose on the District to meet the
anticipated budget deficit in the
coming fiscal year, the special Tax
of the House District
Committee will meet with the Com
in executive session next
to work out a definite pro-
gram of taxation.
The committee has been confronted
with a series of suggestions, ranging
from gross receipts tax on business
eSta blishments to increased taxes on
automobile owners. While no decision
has been reached as to which ones
are to be followed, Chairman Ken
nedy indicated rather significantly
that:
/. Motor vehicle owners will be re-
quired to help make up the shortage
through an increase in the gasoline
tax plus weight tax in lieu of the
present ST registration fee.
2. That insurance companies will
be taxed higher than the present Is
per cent on net premium receipts.
The proposals of the Commissioners
to raise the gasoline tax from 2 to 3
cents a gallon and to place weight
tax on motor vehicles is estimated
to produce only s2,600,000 Of the
once anticipated deficit of S6,O00,000.
An increase in the tax on insurance
companies from is to per cent of
net premium receipts would add about
100000 to this figure.
Would Still Lack $4,000, 900.
If the subcommittee follows these
commentators, there still would
be deficit of s3,2Oo,oOO to make up
through additional taxation How to
do this is the major problem con-
fronting the subcommittee.
Recent developments have indicated
there is possibility of the s6,OOO,OOO
shortage jumping to $4,000 900, but
Chairman Kennedy said the goal of
the subcommittee would be to write
new taxation that would yield the
original estimated deficit of s6 900 900.
Kennedy, however, sensed the pos
sibility of s2,0oOoO0 rise in the
anticipated s6,0oOO00 shortage and
asked Commissioner Hazen what
could be done if the new program
Of taxation failed to balance tho
budget in the coming fiscal year He
replied the only alternative would be
an increase in the present $3.50 levy
on real estate.
A jump in the real estate tax rate
is one possibility the subcommittee
hopes to avoid. Virtually all the
members feel real estate already is
bearing its fair share of the tax load.
The object of the subcommittee is to
spread the tax burden to avoid such
an increase. Kennedy particularly
Is opposed to higher real estate taxes.
Skeptical on New Suggestions.
The two latest plans of the Com
misSioners-an inheritance tax and
a gross receipts tax on business es.
tablishments of all types, coupled with
a nat tax on doctors, dentists, lawyers
and other professional groups-were
not enthusiastically received by the
subcommittee. Several members ex-
pressed the fear Congress might not
look with favor on an inheritance
tax because it would deprive the
Federal Treasury of 80 per cent of
the taxes it now receives from the
District.
The gross receipts tax was froWned
on because it is 50 radically different
from any form OF taxation existing
in the various States. In fact, Rep
resentative Dirkson, Republican. of
Illinois described it as "a stream-line
income tax" and declared if the sub
committee approved it the members
would have to fight every man and
his brother
Since these two plans may be
abandoned, there are rather strong
indications the subcommittee may
finally return to an income tax to
raise some of the balance of the ad.
ditional revenue needed. The Com
mlssloners have vigorously opposed an
income tax, but Kennedy intimated
it probably would be more effective
and easier to collect than privilege
tax on all forms of business as well
as on professional men.
Reorganization Study Looms.
Kennedy said the subcommittee
would include all of it's tax raising
recommendations in single bill,
which probably would be drafted
after the conference with the Com
missioners Tuesday AS soon as the
tax program is completed the sub
committee will begin its study of the
proposed reorganization of the mu-
nicipal government in the interest Of
efficiency and economy.
The subcommittee brought its hear.
1ngs on the tax proposals to a close
late yesterday after hearing Raymond
Sparks, assistant corporation coun-
sci, and Richmond B. Keech, vice
chairman Of the Public Utilities Com.
mission, explain in detail the In
heritance tax and gross receipts tax
plans Of the Commissioners. Keech
is a member Of special committee
of District officials appointed by tho
Commissioners to consider plans for
raising additional taxation.
Theodore Cogswell, register Of
wills of the District, also testified.
offering number of suggestions for
nh