Evening star., 1937-05-23
BY JAMES E. CHINN.

SHlN.>s
The latest plan of the Commissioners
for general sales tax rather than an
| income tax as means of keeping the
wolf away from the door of the mu-
nlclpal government in the new fiscal
year appeared to be gaining approval
| yesterday among members of the
House District Committee, whose lob
1t Will be within the next week TO de-
termine the fate of one of the pro-
posals.
Obviously headed several days ago
toward the congressional graveyard,
the sales tax plan now needs only a
lew more supporters to assure its sue
cess as part of the tax increase pro-
gram the tax subcommittee of the Dis
| trict Committee will write to raise
more than s6,O00,000 needed to offset
the 1888 budget deficit
A poll Of the District Committee
shows that all but seven of the 2l men,
bers have definitely made up their
minds, and of these, six favor the sales
tax and seven the income tax. Doubts
of the constitutionality of a District
income tax has clouded its prospects.
One member, Representative Bigelow.
Democrat of Ohio does not favor either
the sales or income tax plans.
Sales Tax "Stop-Gap" Plan.
Formal approval of their fve-point
tax program, announced yesterday by
the Commissioners, was coupled with
a definite decision that the sales tax
bill would be drawn to provide for
termination of the levy at the end Of
the next fiscal year. The city heads
classed the whole program as q stop
gap" plan, intended to meet the eur.
rent emergency. permanent program
to be framed prior to the next session
Of Congress.
Reinforcement Of the point pro.
gram by the adoption OF sixth meas
ure. use" tax, designed to prevent
evasion Of the proposed sales levy. was
recommended last night by Corpora
tion Counsel Elwood H. Seal. This TAX
Is intended to provide for "policint'
OF the sales tax by making that levy
applicable to products purchased out
side the District and brought in here
for use. Seal plans to submit such a
bill to the Commissioners as soon as
he can draw it.
Seal has been advised by officials Of
the California State Board Of Eouali-
zation that the use" tax provision Is
essential to proper administration Of
a sales tax California has had q
sales tax since 1884.
Group Is Devided.
1t is significant that the House
subcommittee drafting the new tax
program is now equally divided on
the two principal revenue-raising
plans-three favoring q sales tax
and three favoring an income tax.
| There is decided tendency, however,
on the part Of two members to swing
over to the sales tax, leaving Repre-
sentative Dirksen, Republican,, Of
Illinois, as the sole subcommittee adj
vocate Of an income tax.
Once out of the subcommittee,
which meets Tuesday to determine
the new program, the sales tax plan, it
Is believed, will be given the approval
of the full committee.
The survey of the full committee
shows the following members, headed
by Chairman Norton, ready to support
the sales tax: Representatives Ken
nedy of Maryland, Nichols Of Okla
homa, McGehee of Mississippi and
Randolph Of West Virginia, Demo-
Gratis, and Arnold. Republican of
Illinois. Kennedy, Nichols and Nc
Gehee are members Of the Tax Sub
committee.
The income tax supporters. in ad-
dition to Dirksen, are: Representa-
tives Allen Of Delaware, Schultz and
Jenckes, both of Indiana, Democrats;
Cole Of New York and Bates of Mas
sachusetts, Republicans, and Hull,
Progressive of Wisconsin. Allen and
Cole are members of the Tax SUBJ
committee, and both of them, it is
reported. may shift their support to
he sales tax in view Of the growing
sentiment in favor OF the plan.
Sales Tax Receipts Jump.
Popularity Of the sales tax has in
creased rapidly in recent years. In
1880 only two States had adopted
this form Of taxation and in 1885
the number had increased to 15.
Thirty States have an income tax, as
compared with 10 in 1890. but the
adoption Of such a plan in the District
has not been pressed for fear it would
be held unconstitutional, since the
salaries of Federal employees would
have to be taxed to produce the de-
sired amount of revenue. The States
have no authority to tax the income
Of Federal workers.
| Treasury Department figures reveal
that while the revenue accruing from
income taxes in 1880 crossed $240,-
600 900, in the 10 States which used
such levies, the receipts In 1885 had
dropped to $l64,7o0,o0o In 1885, al-
though by that time 80 States had in.
come taxes.
The Treasury figures also show ths
reverse as to the sales tax. In 1890
two States having this levy collected
but 81 200 900 and in 1885 a total Of
1924, 400, 900 was collected by the sales
tax method in the IS States then hav-
ing such levies. This total greatly ex-
(see TAXES. Page A-5)
|