Evening star., 1938-01-12
Proposal of Nichols May Not
Even Be Included in SUBJ
committee Report.
DRAFT OF new BILL
EXPECTED NEXT WEEK
Continuance Of $1.75 Realty Rate
and Modified Business Privilege
Levy Forecast.
By JAMES F., CHINN,

Sales tax advocates among the House
District Committee members con-
f1dently predicted today the con-
templated plan of the subcommittee
on fiscal affairs to impose an income
tax on the residents OF Washington
as a permanent source of revenue
would meet the same fate a similar
plan did a year ago-overwhelming
defeat.
In fact, several of the members said
they did not believe the subcommittee
would even include an income tax in
the new revenue bill it is writing to
keep the District out of the red in
the coming fiscal year.
The specter of an income tax was
linked with the new tax-increase pro-
gram yesterday by Chairman Nichols
of the subcommittee, who indicated
such levy might be proposed as a
compromise to satisfy several men,
bers who had threatened to oppose a
general sales tax or continuation of
the unpopular business privilege tax
on gross receipts.
Considered Time for Test.
Representative Nichols suggested the
income tax might be written into the
bill to become effective in the 1910
fiscal year as substitute for the busi-
ness privilege levy. At first he thought
years delay might allow ample time
for test of the validity of such a
levy in the courts. However, he was
copvipccS hv Poprocepto O tive DirLcop
Republican, of Illinois moot" case
cannot be carried to the courts.
AS an alternative, Mr. Nichols said
It would be possible to write an income
tax in the 1889 revenue bill, providing
for a small levy in order to permit
test of the validity Of an income tax
law in the courts.
The fiscal affairs subcommittee will
not complete the draft of the new tax
bill until Monday. 1t has decided
tentatively to provide for continuation
of the business privilege tax in modi-
fed form, as we'll as the existing SITS
tax on real and personal property, both
of which are scheduled to expire at
the close Of the current fiscal year,
June 80. The real estate levy would
return to the former 150 rate unless
the present rate is reinstated.
Income Tax Undecided.
No definite decision has been
reached as to the income tax, how
ever But members of the full COM
mittee, who must pass on the program
Of the subcommittee, are confident if
such levy is put in the bill it will
be eliminated before the measure is
reported to the House for considera-
tion.
The House last year definitely re-
1ected an income tax proposal, largely
because it feared it would require
members of Congress and their en-
ployes to pay the levy.
AS result, one member of the COM
mittee said:
why send another revenue bill to
the House containing an income tax?
It most certainly will meet the same
fate"
In writing the new revenue bill, the
subcommittee, it was said, will UNDER
take to eliminate number of the in
equities in the present business priv
ilege tax law. Particular attention
will be made to the firms engaged in
interstate commerce.
Under the present law, it was pointed
out, steamboat companies and inter-
state bus lines are required to pay the
business privilege tax, while railroads
are exempt. One change in the pres
ent law, it was said, will be designed to
bring all common carriers under its
provisions.