Evening star., 1937-12-30

AAi PAopoSAIlS pei Ccut OlStIlCL
income tax, the committee, which is
headed by Maj. Daniel J. Donovan,
auditor and budget officer, recon-
mended there be no exemptions other
than those allowed under the Federal
income tax law. 1t said that be-
cause there are number of con-
stitutional questions involved in the
proposed District income tax the
committee felt it was not justified in
relying on the ability of the District
to collect any revenue from this source.
However, the committee figured rough
ly that per cent income tax
would bring in perhaps $l,000,000.
1t is noted in the committees re-
port that while it calculated the addi-
tional revenue need for next year to
be s5,OOO0O0 its proposed revised tax
program carried an estimate Of the
receipts of some $6,OO0,000. Appar-
emily this would allow for the pos
sible loss Of the $1,00000O it call
culated might be received from the
suggested District income levy.
Budget Bureau Proposals.
Reports are that the Budget Bureau
has recommended to Congress that
the District budget for the next fiscal
year be limited to approximately $47.-
100000. or roughly $l,500,000 above
this years total appropriation.
The Tax Committee estimated that
the expected general fund revenue
to be received in the next fiscal year
would amount to some $37, 700 900, or
about $4,000, 900 less than the $4l .OOO,-
900 general fund appropriation said to
have been recommended by the Budget
Bureau. This estimate of revenue is
based on the proposed continuation of
real estate tax rate of $l.5O, a Fed
eral payment of $4,000 0,O0O-the same
as appropriated for this year-not
counting on any of the proposed new
measures as substitutes for the business
privilege tax or this years 25-cent
increase in the tax rate.
The Tax Committee gave official
confirmation to reports published by
The Star that the business privilege
tax on gross receipts has failed to
measure up to last summers estimate
that it would bring in $3,000,0OO. The
committee said the gross-receipts levy
probably would produce less than
$2,500,0 900 and that if this proved cor
rect 1t would raise the expected net
deficit next year to $4,lO0,0OO.
Other Committee Findings.
The committee added:
There is also for consideration the
action Of the Budget Bureau in trans
ferring the street-lighting charge of
$765,00 from the general funds of the
District to the special fund for high
ways and traffic. Should Congress dis
approve this transfer and restore the
street-lighting charge to the general
fund-which the committee believes
under existing law should be done-tne
estimated revenue deficit for 1899
would be increased by an additional
$765, 900. or to a total of $4.9O0,00O.
Your committee. in considering the
additional or new revenue to be raised
in the fiscal year 1889. has used the
sum Of $4,000, 900 as the approximate
amount which must be raised by an
additional Federal payment and (or)
new tax legislation. The committee
submits the following recommended
tions for tax program for the Dis
trict to raise the additional revenue:
Il. An increase in the Federal pay
ment to $7.500000
%. A general sales tax OF not to
exceed 2 per cent, with no exemption.
(The matter Of exemptions is ques-
ton Of policy. The committee feels
that the low rate, together with the
income tax, warranted 1t in providing
for no exemption.)
3. A per cent tax on income. with
only such exemptions as are allowed
under the Federal income tax law.
-. The extension Of section 2 of
title Z Of the Revenue Act of August
II, 1887, which permits the District
to borrow money from the Treasury
to meet the general expenses of the
District in the event that local reve-
nues should fall short OF that pur-
pose.
Fair Tax Urged.
"The committee believes in a fair
and just tax for the citizens of the
District. 1t also believes that the
property OF the Federal Government
should be assessed with the same plan
Of assessment as other District prop
critics and that the amount Of the tax
thus arrived at should be the measure
of the payment Of the Federal Gov
ernment each year.
(According to earlier estimates
the Federal payment would be con-
siderably more than the proposed
$7,500,000 II it were measured by
what would be the Federal tax bill
if the District realty tax rate were
applied to Federal properties in the
District) -.
The committee, in recommending
the general sales tax Of not to exceed
2 per cent, leaving the rate to be fixed
by the Commissioners, is using as its
estimate Of probable revenue under
l per cent sales tax for the fiscal year
1889 the sum of $2,5oo,o0o although
collections might exceed this amount
However, in view Of the experience in
the collection Of the business privilege
tax on gross receipts and the expert
ence in other Jurisdictions, the com
mittee believes It to be wise. at let
for the hrst year, to use q eonserv&1 ~