Evening star., 1937-06-04
DISTRICT REVENUE
MEASURE READY
FOR HOUSE ACTION
$8,5OO,OOO Bill Awaits Ap.
prova| of Full House
Committee.
SPECIAL MEETING
TO BE HELD TUESDAY
Methods of Raising Sum to Meet
Deficit Are Hodge
Podge.'
RY JAMES f. CHINN.


The long awaited tax increase pro-
gram for the District, prescribing a
hodge -podge of methods for raising
s6,149. 900 to preclude the anticipated
budget deficit in the coming fiscal
wear beginning July /, was finally In
condition today for its necessary legis-
ative journey through Congress.
Worked out by special subcom-
mittee Of the House District Commit
tee in cooperation with the Com
missioners and other officials of the
municipal government, the program
now needs only the o. K. of the full
District Committee to be assured OF
House consideration. The full COM
mittee is expected to meet in special
session Tuesday to pass upon the
proposed legislation.
Actually, the various tax plans ap-
proved. according to estimates of the
Commissioners. will raise $500, 900 in
revenue. But in the juggling process
the program went through in the sub
committee, it appears that not more
than s5,5o0,000 will be available to
meet the prospective s6.149 900 short
age. The subcommittee, however, is
confident the estimates of the Com
missioners must have been wrong and
that the tax program it has written
will prevent the use of red ink In the
new fiscal year.
Six-Point Program.
As finally approved by the subcom-
nlittee, the program contains six
points:
l. An income tax, estimated to pro-
duce s2000,O00.
z. A weight tax on motor vehicles,
estimated to yield sl500,0
3. An inheritance and estates tax,
expected to raise $500 900.
T. An increase from Is to 2 per
cent the present tax on net premium
Insurance receipts. estimated to pro-
duce 100000
S. A business privilege tax which
includes levy of IS of per cent
on gross receipts, expected to raise
100000.
S. Strengthening of the present in
tangible personal property tax law,
estimated to increase its yield by
100000.
Altogether, the six plans under these
estimates would produce s8,500,000 in
additional revenue. The subcommittee,
however, adopted several schemes that
will make only s5.500000 of this
amount available for the general fund
IN which the deficit is anticipated
First. it agreed to dump into the
special gasoline tax fund the ST 500 900
expected from the weight tax on motor
vehicles, so as TO support the High
way Department and its program of
improvements to relieve congestion.
This fund also will be used to finance
pertain activities Of the Department
Of Vehicles and Traffic, now paid out
Of the general fund. District officials
estimate this plan will reduce the
general fund deficit of S500.000
Second it agreed to credit on the
income tax payments any payments on
the intangible personal property tax,
which will be continued under the
new program and not repealed as
originally contemplated. The intang-
ible personal property tax is now
yielding about s2,2O0,000 a year. The
teeth" the subcommittee has written
Into the existing law is expected to
produce another 81 900 900, making q
total of s3200000. But credits on
Intangible personal property tax pay
nents will virtually wipe out the bene-
Ats Of the income tax and make the
net gain from the two taxes 81 900 900
The subcommittee, however, be-
heves the income tax will produce far
more than the estimated $4,000 900.
Ence it will tap the net earnings of
all single individuals of 81 900 or more
and those who are married whose net
income is $4,000 or more The only
exemptions will be those prescribed in
she Constitution-the President and
members Of the Federal judiciary.
This refers to the provision IN the
Constitution which provides that the
salaries OF the President and mem
bers Of the Federal judiciary shall
not be diminished" during their term
Of ONCE.
Works to Plug Loopholes.
The subcommittee, incidentally
spent all day yesterday going over the
details OF the income tax bill. per-
fecting It's phraseology and removing
potential loopholes of evasion. Only
two major changes were made in the
original income tax plan of the Com
missioners.
|. A provision was eliminated that
would have made the tax retroactive
and levied on 1896 incomes. The tax
now will be based on 1887 incomes
and paid in 1888
2. Deductions for the support OF a
dependent were raised from 5000 to
s4oo and made to include not only
children under 18, but all others sup
ported by the taxpayer.
The subcommittee also prescribed
that when separate returns are made
by man and wife. the personal exemp-
tion shall be $1,000 each. When joint
returns are made, however, the
exemption would be s2,500.
A futile effort was made by Rep
resentative Allen, Democrat Dela-
wares sole member in the House, to
soak the rich" in the income tax
He proposed to raise the rate on in
comes from s5oO0O upward. His plan
would have imposed rate Of per
cent on incomes between $4,000 and
$4,000, 9 per cent on incomes between
$4,000 and 100000 and 10 per cent
on incomes in excess of that amount
The highest rate prescribed in the
bill approved by the subcommittee
would be 5 per cent on incomes in
excess of S50000.
Aliens motion to include his rate
schedule in the bill, however, was
lost for want OF second.
Allen also took leading part in
the fight to remove the retroactive
provision in the income tax bill. and
at the outset OF the discussion de-
clared: That will cause a lot OF
trouble"
: