Evening star., 1938-03-23
HIGH OFFICIALS
EXEMPT IN D. c.
INCOME TAX PLAN
President, Cabinet, Jurists
and Congress Members
Are on List.
SUBCOMMITTEE BACKS
LEVY FOR THIS YEAR
Quarterly Installments, Payable
Starting Next March Is,
Are Provided.
By JAMES E. CHINN.

The President, cabinet officers, mem.
bers of the Federal judiciary and men,
bers of Congress and their secretaries
who are not residents, will be exempt
from payment of the proposed local
income tax, the Fiscal Affairs Sub
committee of the House District Com
mittee definitely decided today as it
applied finishing touches to the 1899
revenue bill
The subcommittee also decided to
apply the tax to incomes for the cur
rent calendar year and make it pay
able between March Is and May Is,
1889. Thereafter, the tax can be paid
in quarterly installments, like the Fed
eral income levy.
The original revenue bill would
have made the tax retroac ctive by ap-
plying it to 1887 incomes.
The change in the application Of
the tax from the 1887 to 1888 incomes
was made because of belief that a
retroactive levy might not be held
constitutional. Under the new plan,
it was pointed out, the tax will not
be retroactive, and the municipal gov
ernment at the same time will get the
revenue in the coming fiscal year in
which it is needed to balance the 1899
budget.
Million More Revenue Seen.
The inp0Y11e to will opy>l,, boft -
individuals and corporations and is
estimated to raise about $4,000, 900 in
additional revenue. The net return,
however, is estimated at about $2,000,-
600 because a credit is to be allowed
for Federal income tax payments as
well as local intangible tax payments.
Before the subcommittee met, Ed
ward F. Colladay. president of the
Washington oBard of Trade, told
Chairman Palmisano of the House Dis
trict Committee that S1.70 real estate
tax rate, coupled with the proposed
sl-a-barrel local levy on beer and the
50-cent increase in the tax on hard
liquor, will raise sufficient revenue to
cover the now anticipated So, 700 900
budget deficiency in the coming fiscal
year. The real estate tax rate is
now SITS.
II this tax program is followed,
Mr.. Colladay said, it will be unneces-
sary to add either an income tax or
a modified business privilege tax.
May Wait Until April II.
Chairman Nichols of the subcom-
mittee had planned to have the bill
ready for consideration of the full
committee at its regular meeting to-
day, so favorable report would place
it on the House calendar in time for
District day" Monday. Recent de-
lays, however, now indicate the meas
ure will not be called up in the House
until April H.
In his letter to Chairman Palmisano
Mr.. Colladay said:
The Board of Trade, together with
many other organizations, opposed the
continuance of the present business
privilege tax. In lieu thereof the
board urged retail sales tax as be-
ing the most effective means of sup
plementing the many other taxes
which We have as permanent parts
of the District of Columbia tax sys-
tenn. We thought it was necessary
to make certainty of raising a def
mite amount of money and that the
sales tax would do that better than
any other form of tax.
I'VE are now informed that your
committee has definitely decided
against the retail sales tax and also
not to renew or extend the business
privilege tax. at least in its present
form. We are also informed that
your committee is giving serious con-
sideration to reporting to the House
of Representatives general income
tax with rates graduated from / to
10 per cent with certain credits.
Opposed to Income Tax.
"As you have already been informed
at the hearings, this organization is
unqualifiedly opposed to general in
come tax to be added to other taxes
now in our permanent law.
In view of the foregoing, we re-
spectfully suggest that your commit
tee give consideration to modif1ca-
tion of the business privilege tax to
raise any revenue needed to meet the
requirements of the District of Co.
lumbia appropriation bill for the fiscal
year ending June 80. 1889. The busi-
ness privilege tax under various names
has been in use in several jurisdic-
tions in recent years, and we believe
it is possible to modify the present
business privilege tax so that it will
raise any needed revenue and yet have
removed from it those inequalities and
injustices which caused the general
demand for its elimination. We will
be very glad to cooperate with your
committee in solving this problem If
you are willing to take it up.
However. the report of the con-
ferees on the appropriation bill indi-
Gates a deficit Of only $3,700,000. A
rate of $1.70 on real estate with beer
tax and increased liquor tax added
thereto. we believe, win raise sufficient
revenue to cover this deficiency. II