Evening star., 1938-04-06
BY JAMES E. CHINN.

The House District Committee late
today put its final stamp of approval
on the 1888 revenue bill, leaving intact
the income tax plan which would ex-
empt the salaries of a select group,
including cabinet officers and men,
bers Of Congress.
Prior to approving the income tax
the committee restored the local beer
tax in the bill but reduced the rate
from IS to so cents a barrel The
75-cent beN tax was tentatively re-
moved from the bill yesterday largely
through the efforts of Chairman
Palmisano and Representative Ken
nedy. Democrat. Of Maryland. both
of whom live in Baltimore. which
produces about 25 per cent of the
beer sold in Washington. These two
members are understood to have ap-
proved the compromise 50-cent rate.
The bill now will be placed on the
House calendar and called up Mon
day, the next District day.
Few Minor Changes.
Final action was taken in executive
session, but Chairman Palnisano re-
vealed afterWard that only few rela-
lively minor changes were made in the
income tax section. Three and half
hours were devoted to studying the
income tax provisions and the re-
newed discussion over the beer tax.
All other features Of the bill were
approved yesterday in executive ses-
sion.
In final form 1t is estimated the bill
will produce s5,200oO0 in additional
revenue in the coming fiscal year.
Mai Daniel J. Donovan. District
auditor and budget officer, advised the
committee the anticipated budget
deficit which the various new taxes are
intended to offset will amount to s4,-
500 900, instead of s3,70O,o00 as pre-
viously estimated.
Surplus of 100000.
On the basis of these calculations
there would be a surplus of about
S700, 900 in the municipal treasury at
the close of the coming fiscal year,
providing there are no deficiency ap-
propriations for public relief or other
purposes.
The major tax features Of the bill
and the estimated amount OF rev.
enue they will yield follow:
l. An income tax on individuals
and corpora tions - s5,000,000 less
$4,000 900 for intangible tax payment
credits, making net of s2000,000.
The individual tax on income will
range from l per cent to 10 per cent.
The corporation tax ranges from to
6 per cent.
2. Continuation of the SITS real
estate tax rate-s3000 $1,000.
3. A tax of so cents barrel on
beer-$200, 900.
Sections Already Approved.
The committee also approved the
following sections of the bill:
l. Continue ton of the existing SITS
real estate tax rate in the coming
fiscal year.
2. Continuation of the enforcement
provisions of the business privilege
tax law, which expires at the close
of the present fiscal year, June 80.
3. Outright repeal of the long-inop-
erative substantive law which requires
the Federal Government to pay 40
per cent of the expenses Of the Dis
trict.
4. Extending the automobile license
tag year to March l.
S. Reducing the minimum registra-
ton fee for automobile trailers from
SIS to SIS a year.
Tax Section Last.
The income tax section, over which
a fight had been anticipated, was pur-
posely left by the committee for final
examination. In view of recent protests
against this plan, it was thought there
might have been efforts to substitute
a general sales tax on modified busi-
ness privilege tax, as recommended
by representatives of group of lead
ing business and civic organizations.
These recommendations were en-
bodied in statement left with the
committee yesterday when it elected
the representatives of the business and
civic organizations and proceeded to
consider the bill in executive session.
The statement also proposed an in
crease of Is cents in the present So
cents-per-gallon tax on hard liquor.
pointing out the additional revenue
from this source, coupled with the
beer tax and s1.75 real estate tax
rate would yield more revenue than
necessary to meet the anticipated
budget deficit IN the coming fiscal
year.