Evening star., 1938-11-28
BY JAMES E. CHINN.

representatives OF various CIVIC
groups and individual taxpayers
began to shoot holes today in the
suggested new District tax program
at the first of series of public hear
ings called by the Commissioners
Tax Advisory Committee.
The principal target was the pro-
posed retail sales tax which, it was
argued, would constitute an unjust
and unfair levy because it is based
not on the ability, but the inability
to pay. The consensus of most of
the first witnesses was that a grad
uated personal income tax would be
far more equitable than a sales tax.
The Federal Government also was
criticised by most of the witnesses
for its failure to make a fair and
just payment toward the cost of the
District government.
Maj. Daniel j. Donovan, District
auditor and budget officer as chair
man OF the Tax Advisory Commit
tee, presided at the hearing, which
was held in the Senate Judiciary
Committee room The room was
crowded with witnesses and spec
tators.
Colin F. STAN, chief of staff of
the congressional Joint Committee
on Internal Revenue Taxation, in
charge of the tax survey ordered
by the last session of Congress, and
DR.. Chester B. Pond, survey di-
rector, sat with the Advisory Com
mittee during the hearing.
The Program.
The tax program suggested by the
Advisory Committee for public con-
sideration" proposes:
/. Repeal of the intangible per-
sonal property tax.
2. Abandonment of the business
privilege tax, which would expire
automatically June 30.
3. A corporation net income tax,
following closely a similar Federal
tax. with fiat rate tentatively fixed
at per cent-such a tax to be ap-
piled to Washington's four major
utilities, which also would have to
pay a special franchise tax on gross
receipts.
4. Adopt combination levy con-
sisting of "non-salary. non-wage
personal net income tax and a retail
sales tax exempting food. medicine
and rent and retail sales of personal
property below some fixed amount"
Suggested rates for the limited per-
sonal net income would range from
2 to per cent, it was said. An
earned income credit might be al
lowed business men 80 that the
graduated tax may be regarded as in
true conformity with the ability the
ory which calls for heavier taxation
of unearned income"
Donovan Opens Hearing.
Maj. Donovan opened the hearing
by reading long statement on be-
half of the Advisory Committee, re-
lating to its study of the tax struc-
ture of the District
The pending tax study, he pointed
out, is the third made in the last
three years.
1T is our hope" he said, that
legislation will grow out of the study
now in progress which will result in
legislation by Congress providing a
fair and equitable tax system for the
District.
Maj. Donovan also explained that
no conclusions have yet been reached
by any of the parties concerned with
the present tax study, and expressed
the hope that the series of public
hearings would be productive of
helpful suggestions
He did, however, call attention
to the proposed tax program which
has been advanced to overcome de
fects' in the present tax system.
What Are Needs?
why is additional revenue re-
quired?' Maj Donovan asked.
THE propriety of any tax must
be measured by necessity" he de-
clared. "The Advisory Committee
does not believe that taxes should
be increased, either by increasing
the rates of present taxes or by the
introduction of new forms of taxes,
merely because the suggested new
taxes could be borne by the tax
payers or because the District gov
ernment could spend the money if
(See TAKES, Page A-4)